As filed with the Securities and Exchange Commission on May 6, 1996
--------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM T-3
FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES
UNDER THE TRUST INDENTURE ACT OF 1939
-------------------
ANACOMP, INC.
(Name of applicant)
11550 North Meridian Street
P.O. Box 40888
Indianapolis, Indiana 46240
(Address of principal executive offices)
--------------------
Securities to be Issued Under the Indentures to be Qualified
Title of Class Amount
11 5/8% Senior Secured Notes due 1999 up to $120,000,000
13% Senior Subordinated Notes due 2002 up to $160,000,000
Approximate date of proposed public offering: On, or as soon as practicable
after, the effective date of the applicant's proposed chapter 11 plan of
reorganization, which is anticipated to be May 28, 1996.
Name and Address of agent for service:
George C. Gaskin, Esq.
Corporate Counsel
Anacomp, Inc.
2115 Monroe Drive, N.E.
Atlanta, Georgia 30324
(404) 876-3361
Copy to:
Michael C. Ryan, Esq.
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
(212) 504-6000
The Obligor hereby amends this application for qualification on such date
or dates as may be necessary to delay its effectiveness until (i) the 20th day
after the filing of a further amendment which specifically states that it shall
supersede this amendment or (ii) such date as the Commission, acting pursuant to
Section 307(c) of the Act, may determine.
Page 1 of 26 Pages
(Exhibit Index Appears on Page 25)
<PAGE>
GENERAL
1. General Information. Furnish the following information as to the
applicant:
(a) Form of organization:
A corporation.
(b) State or other sovereign power under the laws of which organized:
Indiana.(1)
1 The Applicant will be reincorporated in the State of Delaware on or about the
Effective Date.
2. Securities Act Exemption Applicable. State briefly the facts relied upon
by the applicant as a basis for the claim that registration of the indenture
securities under the Securities Act of 1933, as amended, is not required.
Each capitalized term that is used herein and not otherwise defined in this
Item 2 or in Item 3 below has the meaning assigned to such term in the Second
Amended Joint Plan of Reorganization (the "Plan"), dated March 28, 1996, and the
Disclosure Statement, dated March 28, 1996 (the "Disclosure Statement"), copies
of which are included as Exhibits T3E.1 and T3E.2 hereto, respectively.
Anacomp, Inc., an Indiana corporation (the "Applicant"), intends to issue
11 5/8% Senior Secured Notes due 1999 (the "New Senior Secured Notes") and 13%
Senior Subordinated Notes due 2002 (the "New Senior Subordinated Notes") on the
Effective Date of the Plan, which Plan the Applicant filed with the United
States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") on
March 28, 1996 in connection with the Applicant's voluntary petition for relief
under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code").
The Applicant filed its voluntary petition for relief with the Bankruptcy Court
on January 5, 1996.
The Applicant is currently a debtor and debtor in possession under Chapter
11 of the Bankruptcy Code and began soliciting acceptances (the "Solicitation")
from the Holders of its outstanding debt securities for the acceptance or
rejection of the Plan (and the transactions contemplated thereby) promptly
following Applicant's Disclosure Statement hearing on March 28, 1996.
The confirmation hearing with the Bankruptcy Court is on May 17, 1996. If
the Plan is confirmed by the Bankruptcy Court, on the Effective Date, the New
Senior Secured Notes will be exchanged as provided in the Plan and issued to
Holders of Claims of the Applicant's Old Credit Facilities and Holders of the
Applicant's Old Senior Notes. In addition, on the Effective Date, the New Senior
Subordinated Notes will be exchanged as provided in the Plan and issued to
Holders of the Applicant's Old Senior Subordinated Notes. Such Holders will
receive the New Senior Secured Notes or the New Senior Subordinated Notes as the
result of their Class's decision to accept or reject the Plan in accordance with
the procedures described in the Disclosure Statement and Plan. Among the other
transactions that will occur on the Effective Date pursuant to the Plan are the
following: (i) the issuance of 92.5% of the New Common Stock to the Holders of
the Applicant's Old Senior Subordinated Notes; (ii) the conversion of
approximately $33.7 million aggregate principal amount outstanding plus unpaid
accrued regular interest of the Applicant's Old Subordinated Debentures to 7.5%
of the New Common Stock and 71% of the New Warrants and the issuance of such
stock and warrants to the Holders of the Old Subordinated Debentures; (iii) the
conversion of 485,750 shares of the Applicant's Old Preferred Stock and 46.2
million shares of the Applicant's Old Common Stock to 17% of the New Warrants
and the issuance of such warrants to the Holders of the Old Preferred Stock and
Old Common Stock; and (iv) the cancellation of the Old Credit Facilities, the
Series B Note Purchase Agreement, the Old Senior Subordinated Notes Indenture,
the Old 13.875% Subordinated Debentures Indenture and the Old 9% Subordinated
Debentures Indenture.
With respect to the offer and exchange of New Senior Secured Notes and the
New Senior Subordinated Notes on the Effective Date as described above, the
Applicant intends to rely on the exemption from the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act"), and of equivalent
state securities and "blue sky" laws, provided by section 1145(a)(1) of the
Bankruptcy Code. Section 1145(a)(1) of the Bankruptcy Code exempts the offer and
sale of securities under a bankruptcy plan of reorganization from registration
under the Securities Act and under equivalent state securities and "blue sky"
laws if the following requirements are satisfied: (i) the securities are issued
by the debtor (or its successor) under a plan of reorganization; (ii) the
recipients of the securities hold a claim against the debtor, an interest in the
debtor or a claim for an administrative expense against the debtor; and (iii)
the securities are issued entirely in exchange for the recipient's claim against
or interest in the debtor. The Applicant believes that the offer and exchange of
the New Senior Secured Notes and the New Senior Subordinated Notes under the
Plan will satisfy such requirements of section 1145(a)(1) of the Bankruptcy Code
and, therefore, such offer and exchange will be exempt from the registration
requirements referred to above.
AFFILIATIONS
3. Affiliates. Furnish a list or diagram of all affiliates of the applicant
and indicate the respective percentages of voting securities or other bases of
control.
As of May 6, 1996
Applicant's Controlled Affiliates Percentage of Voting Securities
(i.e., wholly owned subsidiaries) Owned by Applicant
- ------------------------------------------------------------------
Applied Peripheral Systems, Inc. 100%
Cadren Systems Corporation 100%
Data Management Labs, Inc. 100%
Dysan International Sales Corporation 100%
Dysan International Sales Corporation II 100%
Teksad Corporation 100%
U.S. Video Corporation 100%
Xidex Development Corporation 100%
Xidex International Sales Corporation 100%
Xidex Magnetics International Sales Corporation 100%
Florida AAC Corporation 100%
Kalvar Microfilm, Inc. 100%
Computer Services Corp. 97%(1)
Anacomp International N.V. 100%
Xidex GmbH 100%
Anacomp GmbH (2)
Datamagnetics GmbH (2)
Anacomp Holdings Ltd. (U.K.) 99.6%(3)
Anacomp Ltd. (4)
Xidex (U.K.) Ltd. (4)
Anacomp B.V. 100%
Anacomp A.B. (5)
Anacomp A/S (Norway) (6)
Anacomp O.Y. (6)
Anacomp A/S (Denmark) (6)
Anacomp S.A. 100%
Anacomp GesmbH 100%
Anacomp Belgium S.A. 100%
Anacomp Italia SRL 100%
Xidex Magnetics S.A. 100%
Xidex Corp. S.A. 100%
Anacomp Canada, Inc. 100%
Anacomp do Brasil Ltda. 100%
Anacomp Japan Ltd. 100%
Anacomp Pty Ltd. 100%
Xidex New Zealand Ltd. 100%
- ---------------------------
(1) The remaining 3% of the outstanding and issued common stock of Computer
Services Corp. is held by individuals who failed to exchange Computer Services
Corp. common stock for Anacomp, Inc. common stock when Anacomp, Inc. purchased
Computer Services Corp. in November, 1979.
(2) Anacomp GmbH and Datamagnetics GmbH are wholly-owned subsidiaries of
Xidex GmbH, which is a wholly-owned subsidiary of Anacomp, Inc.
(3) The remaining 0.4% of the outstanding and issued common stock of
Anacomp Holdings Ltd. (U.K.) is held by Anacomp B.V., which is a wholly-
owned subsidiary of Anacomp, Inc.
(4) Anacomp Ltd. and Xidex (U.K.) Ltd. are wholly-owned subsidiaries
of Anacomp Holdings Ltd. (U.K.), of which Anacomp, Inc. owns 99.6% of
the outstanding and issued common stock.
(5) Anacomp A.B. is a wholly-owned subsidiary of Anacomp B.V., which is a
wholly-owned subsidiary of Anacomp, Inc.
(6) Anacomp A/S (Norway), Anacomp O.Y. and Anacomp A/S (Denmark) are
wholly-owned subsidiaries of Anacomp A.B., which is a wholly-owned subsidiary of
Anacomp B.V. Anacomp, Inc. owns 100% of the outstanding and issued common stock
of Anacomp B.V.
Currently, the Applicant does not have any Controlling Affiliates.
On the Effective Date of the Plan
The Company will reorganize its corporate structure by merging the
following wholly-owned, domestic subsidiaries into Reorganized Anacomp: Applied
Peripheral Systems, Inc., Cadren Systems Corporation, Data Management Labs,
Inc., Dysan International Sales Corporation, Dysan International Sales
Corporation II, Teksad Corporation, U.S. Video Corporation, Xidex Development
Corporation, Xidex International Sales Corporation, Xidex Magnetics
International Sales Corporation, Kalvar Microfilm and Computer Services Corp.
Anacomp International N.V. will be liquidated and dissolved. Accordingly,
following confirmation of the Plan, Anacomp will have one domestic wholly-owned
subsidiary, Reorganized Florida AAC Corporation. Other than Anacomp
International N.V., none of Anacomp's foreign subsidiaries will be affected by
the Plan. However, 100% of the common stock of Reorganized Florida AAC
Corporation and the Foreign Restricted Subsidiaries (as defined in the New
Senior Secured Notes Indenture) will be pledged pursuant to the terms of the New
Senior Secured Notes Security and Pledge Agreement. In addition, on the
Effective Date, the shares of Old Preferred Stock, the Old Common Stock and all
currently outstanding warrants and options to purchase Old Common Stock will be
canceled, the Interests represented by such shares, warrants and options will
terminate, and the Applicant's equity structure will be recapitalized in
accordance with the terms and provisions of the Plan.
On the Effective Date, the Applicant will merge with and into a
newly-created, wholly-owned subsidiary organized in Delaware, to be called
Anacomp, Inc. The Applicant's Certificate of Incorporation on the Effective Date
(the "Amended Anacomp Articles") will reflect the equity recapitalization.
Pursuant to the Amended Anacomp Articles, the Applicant will be authorized to
issue 21,000,000 shares of capital stock, consisting of 20,000,000 shares of
common stock, $.01 par value per share ("New Common Stock") and 1,000,000 shares
of preferred stock, par value $.01 per share. On the Effective Date, the
Applicant will issue in exchange for its Old Senior Subordinated Notes, Old
Subordinated Debentures, Old Preferred Stock and Old Common Stock, 10,000,000
shares of New Common Stock and 362,694 New Warrants to purchase in the aggregate
362,694 shares of New Common Stock.
As a result, on the Effective Date, Holders of Old Senior Subordinated
Notes will receive, in the aggregate, 9,250,000 shares, or 92.5%, of the New
Common Stock, and Holders of Old Subordinated Debentures will receive, in the
aggregate 750,000 shares, or 7.5%, of the New Common Stock.
On the Effective Date, Anacomp also will issue, in the aggregate (i)
259,068 New Warrants to Holders of Old Subordinated Debentures, (ii) 62,176 New
Warrants to Holders of Old Preferred Stock and (iii) 41,450 New Warrants to
Holders of the Old Common Stock.
On the Effective Date, the Applicant's Controlled Affiliates will be as
follows:
Percentage of Voting Securities
Applicant's Controlled Affiliates Owned by Applicant
- ------------------------------------------ --------------------------------
Florida AAC Corp. 100%
Xidex GmbH 100%
Anacomp GmbH (1)
Datamagnetics GmbH (1)
Anacomp Holdings Ltd. (U.K.) 99.6%(2)
Anacomp Ltd. (3)
Xidex (U.K.) Ltd (3)
Anacomp B.V. 100%
Anacomp A.B. (4)
Anacomp A/S (Norway) (5)
Anacomp O.Y. (5)
Anacomp A/S (Denmark) (5)
Anacomp S.A. 100%
Anacomp GesmbH 100%
Anacomp Belgium S.A. 100%
Anacomp Italia SRL 100%
Xidex Magnetics S.A. 100%
Xidex Corp. S.A. 100%
Anacomp Canada, Inc. 100%
Anacomp do Brasil Ltda. 100%
Anacomp Japan Ltd. 100%
Anacomp Pty Ltd. 100%
Xidex New Zealand Ltd. 100%
- ---------------------------
(1) Anacomp GmbH and Datamagnetics GmbH are wholly-owned subsidiaries of
Xidex GmbH, which is a wholly-owned subsidiary of Anacomp, Inc.
(2) The remaining 0.4% of the outstanding and issued stock of Anacomp
Holdings Ltd. (U.K.) is held by Anacomp B.V., which is a wholly-owned
subsidiary of Anacomp, Inc.
(3) Anacomp Ltd. and Xidex (U.K.) Ltd are wholly-owned subsidiaries of
Anacomp Holdings Ltd (U.K.), of which Anacomp, Inc. owns 99.6% of the
outstanding and issued stock.
(4) Anacomp A.B. is a wholly-owned subsidiary of Anacomp B.V., which is a
wholly-owned subsidiary of Anacomp, Inc.
(5) Anacomp A/S (Norway), Anacomp O.Y. and Anacomp A/S (Denmark) are
wholly-owned subsidiaries of Anacomp A.B., which is a wholly-owned subsidiary of
Anacomp B.V. Anacomp, Inc. owns 100% of the outstanding and issued stock of
Anacomp B.V.
The Applicant has not been advised by certain holders of its Old Senior
Subordinated Notes, which may be affiliates of the Applicant as of the Effective
Date upon the confirmation of the Plan, whether such security holders will
continue to hold their Old Senior Subordinated Notes through the Effective Date.
The Applicant, therefore, cannot accurately determine whether any Holder of the
Old Senior Subordinated Notes will be an affiliate of the Reorganized Anacomp.
MANAGEMENT AND CONTROL
4. Directors and Executive Officers. List the names and complete mailing
addresses of all directors and executive officers of the applicant and all
persons chosen to become directors or executive officers. Indicate all offices
with the applicant held or to be held by each person named.
As of May 6, 1996
Name Mailing Address Office
- ----- ---------------------- --------------------
Paul G. Roland c/o Ruckelshaus, Roland, Chairman of the Board
Hasbrook & O'Connor
107 N. Pennsylvania St.,
#900
Indianapolis, IN 46204
Clark A. Johnson c/o Pier 1 Imports, Inc. Director
P.O. Box 961020
Fort Worth, TX 76161-0020
Richard E. Neal c/o Anacomp, Inc. Director
11550 North Meridian St.
Suite 600
Carmel, IN 46032
Roger S. Palamara c/o Bank One Director
Bank One Center Tower,
Suite 1821
Indianapolis, IN 46277-0118
Frederick W. Zuckerman Zuckerman, Firstenberg Director
& Associates,
L.L.C.
One State Street Plaza
33rd Floor
New York, NY 10004
P. Lang Lowrey III 2115 Monroe Drive, N.E. Director, President and
Atlanta, GA 30324-4832 Chief Executive Officer
Donald L. Viles P.O. Box 40888 Executive Vice
Indianapolis, IN 46240 President and Chief
Financial Officer
William C. Ater P.O. Box 40888 Vice President and
Indianapolis, IN 46240 Chief Administrative
Officer
K. Gordon Fife P.O. Box 40888 Vice President - Tax
Indianapolis, IN 46240
Hasso Jenss c/o Anacomp GmbH President - European
Didierstrasse 27C Group
6200 Wiesbaden, Germany
Thomas W. Murrel P.O. Box 509005 President - Anacomp
San Diego, CA 92150 Worldwide Operations
Group
Michael H. Riley P.O. Box 509005 President - Strategic
San Diego, CA 92150 Partners Group
Gary M. Roth P.O. Box 509005 President -
San Diego, CA 92150 International Group
Thomas R. Simmons P.O. Box 509005 President - U.S. Group
San Diego, CA 92150
Peter Williams c/o Anacomp President - Magnetics
Intermediare Road Group
Bryn Mawr, Gwent U.K. NP3-4YA
The Post-Restructuring Board shall consist of the following individuals: P.
Lang Lowrey III, Talton R. Embry, Jay P. Gilbertson, Darius W. Gaskins Jr.,
Richard D. Jackson, George A. Poole Jr. and Lewis Solomon. Unless the Applicant
files a written notice with the Bankruptcy Court stating otherwise, the
executive officers of the Applicant immediately before confirmation of the Plan
shall continue to serve in their respective capacities immediately after
confirmation of the Plan.
5. Principal Owners of Voting Securities. Furnish the following information
as to each person owning 10% or more of the voting securities of the Applicant.
As of May 6, 1996, no person owned, beneficially or otherwise, 10% or more
of the voting securities of the Applicant.
On the Effective Date of the Plan
There are currently several Holders of Old Senior Subordinated Notes who
may be deemed a beneficial owner of 10% or more of the voting securities of the
Applicant pursuant to the Plan on the Effective Date. The Applicant has not been
advised by such holders whether such security holders will continue to hold
their Old Senior Subordinated Notes through the Effective Date. The Applicant,
therefore, cannot accurately determine whether any Holder of the Old Senior
Subordinated Notes will own more than 10% of the voting securities of the
Reorganized Anacomp.
UNDERWRITERS
6. Underwriters. Give the name and complete mailing address of (a) each
person who, within three years prior to the date of filing the application,
acted as an underwriter of any securities of the applicant which were
outstanding on the date of filing the application, and (b) each proposed
principal underwriter of the securities proposed to be offered. As to each
person specified in (a), give the title of each class of securities
underwritten.
(a) None.
(b) None.
CAPITAL SECURITIES
7. Capitalization. (a) Furnish the following information as to each
authorized class of securities of the applicant.
As of April 8, 1996
<TABLE>
<CAPTION>
Column A Column B Column C
Title of Class Amount Authorized Amount Outstanding
<S> <C> <C>
Common Stock, $.01 par value (Old Common 100,000,000 shares 48,013,246
Stock)
8.25% Cumulative Convertible Redeemable 1,000,000 402,235
Exchangeable Preferred Stock, $.01 Par
Value (Old Preferred Stock)
15% Senior Subordinated Notes due 2000 $224.9 million aggregate $224.9 million aggregate principal
(Old Senior Subordinated Notes) principal amount amount
13.875% Convertible Subordinated $50.0 million aggregate $23.2 million aggregate principal
Debentures due 2002 (Old 13.875% principal amount amount
Subordinated Debentures)
9% Convertible Subordinated Debentures $12.5 million aggregate $10.5 million aggregate principal
due 1996 (Old 9% Subordinated Debentures) principal amount amount
</TABLE>
Additional Securities
(1) In October 1990, Anacomp issued 6,825,940 warrants to Holders of the
Old Senior Subordinated Notes. Each warrant entitles the Holder to purchase one
common share at a price of $1.873 and is exercisable through November 11, 2000,
the date of expiration.
(2) On February 4, 1990, the Company adopted a Shareholder Rights Plan (the
"Rights Plan") which provides each registered Holder the right to purchase from
the Company one-tenth of a share of the Company's common stock, par value $.01
per share, at a cash exercise price of $3.20 subject to adjustment.
The rights will be exercisable only if a person or group acquires
beneficial ownership of 15% or more of the outstanding shares of common stock of
Anacomp, or announces a tender or exchange offer upon consummation of which such
person or group would beneficially own 30% or more of the Company's common
stock.
Anacomp can redeem the rights at $.001 per right at any time until the
tenth day following the announcement that a 15% ownership position has been
acquired. Under certain circumstances as set forth in the Rights Plan, the
decision to redeem shall require the concurrence of a majority of the Continuing
Directors (as defined in the Rights Plan). The rights expire February 26, 2000.
(3) Anacomp's stock option plans provide that the exercise price of the
options are determined by the Board of Directors, and in no case can be less
than 100% of fair market value at the time of grant for qualified options, or
less than the par value of the stock for non-qualified options. An option may be
exercised subject to such restrictions as the Board may impose at the time the
option is granted. In any event, each option shall terminate not later than 10
years after the date on which it is granted, except for certain non-qualified
options which shall terminate not later than twenty years after the date on
which granted. As of September 30, 1995, shares available for grant under the
plan was 1,401,328. Options outstanding as of September 30, 1995 were
3,507,895, of which 2,512,992 are exercisable.
(4) Under the Employee Stock Purchase Plan, Anacomp may offer to sell
common stock to its employees. Purchases of these shares are made by employee
participants periodically at 85% of the market price on the date of offer or
exercise, whichever is larger.
Pursuant to the Plan, Holders of Rights, Warrants to purchase Old Common
Stock, employee stock options and all other options granted to employees of the
Company will receive no consideration.
On the Effective Date of the Plan
<TABLE>
<CAPTION>
Column A Column B Column C
--------- -------- ---------
Title of Class Amount Authorized Amount Outstanding
-------------- ----------------- ------------------
<S> <C> <C>
Common Stock, $.01 par value (New 20,000,000 shares 10,000,000 shares (1)
Common Stock)
Preferred Stock 1,000,000 shares None (2)
(New Preferred Stock)
New Senior Secured Notes due 1999 up to $120.0 million aggregate up to $120.0 million aggregate
face amount(1) face amount(3)
New Senior Subordinated Notes due 2002 up to $160,000,000 aggregate face up to $160,000,000 aggregate
amount(2) face amount(4)
</TABLE>
(1) Following the Effective Date, there will be 362,694 New Warrants of the
Applicant outstanding. Each New Warrant entitles the holder to purchase one
share of New Common Stock at an exercise price of $12.23 per share.
(2) Pursuant to the Amended Anacomp Articles, the Post-Restructuring Board
will be authorized to issue New Preferred Stock from time to time, in one or
more series, for any purpose permitted by law, and will be authorized to fix the
designations, powers, rights and preferences with respect to the New Preferred
Stock.
(3) On the Effective Date, the principal amount of New Senior Secured Notes
will be reduced by the Cash Sweep Amount, which is $7.5 million.
(4) Following the Effective Date, interest shall be payable on June 30,
1996 (in the event that the Plan shall become effective by that date), December
31, 1996 and June 30, 1997 in additional New Senior Subordinated Notes.
(b) Give a brief outline of the voting rights of each class of voting
securities referred to in paragraph (a) above.
Old Common Stock: Each share of the Old Common Stock is entitled to one
vote and the Applicant's Articles of Incorporation currently in effect does not
provide for cumulative voting.
New Common Stock: Each share of the New Common Stock will be entitled to
one vote and the Amended Anacomp Articles will not provide for cumulative
voting.
INDENTURE SECURITIES
8. Analysis of indenture provisions. Insert at this point the analysis of
indenture provisions required under Section 305(a)(2) of the Trust Indenture Act
of 1939.
All references to the Indenture herein refer to the New Senior Secured
Notes Indenture to be dated as of the Effective Date between the Applicant and
the New Senior Secured Notes Indenture Trustee and the New Senior Subordinated
Notes Indenture to be dated as of the Effective Date between the Applicant and
the New Senior Subordinated Notes Indenture Trustee (the New Senior Secured
Notes Indenture together with the New Senior Subordinated Notes Indenture, used
herein, the "Indentures"). Each capitalized term that is used in this Item 8 and
is not otherwise defined below or elsewhere in this application or the Plan has
the meaning assigned to such term in the Indentures. A copy of each of the
Indentures, including the form of New Senior Secured Note and New Senior
Subordinated Note, is included hereto as Exhibit T3C.1 and T3C.2, respectively.
New Senior Secured Notes Indenture
(A) Events of Default
An Event of Default will occur under the New Senior Secured Notes Indenture
if:
(i) the Applicant fails to make any payment of interest on any New Senior
Secured Note when it becomes due and payable, and such default continues for a
period of 30 days; or
(ii) the Applicant fails to (A) make the payment of the principal of (or
premium, if any, on) any New Senior Secured Note when it becomes due and payable
at maturity, upon acceleration, redemption or declaration, or otherwise or (B)
redeem or purchase the New Senior Secured Notes as required by the New Senior
Secured Notes Indenture; or
(iii) the Applicant or any of its Restricted Subsidiaries fails to comply
with Article 5 of the New Senior Secured Notes Indenture relating to the
consolidation, merger or sale of the Applicant or any Restricted Subsidiary's
assets into a successor company; or
(iv) the Applicant or any Restricted Subsidiaries fails to comply with
certain covenants relating to, among other things, a change in control, the
making of certain restricted payments, the incurrence of additional
indebtedness, the creation of liens and impairment of collateral, the sale of
assets and Restricted Subsidiary Stock, the incurrence of Restricted Subsidiary
Indebtedness and the issuance of preferred stock, transactions with affiliates,
the issuance and sale of Capital Stock of Restricted Subsidiaries, capital
expenditures and the filing of appropriate SEC reports (other than a failure to
purchase New Senior Secured Notes where required pursuant to covenants governing
the sale of assets and Restricted Subsidiary stock and a change in control), and
such failure continues for 30 days after the notice specified below or the
Applicant fails to give the notice specified below; or
(v) the Applicant fails to comply with any of its agreements in the New
Senior Secured Notes or New Senior Secured Notes Indenture (other than those
specified in clauses (i), (ii), (iii) and (iv) above) and such failure continues
for 60 days after the notice specified below or the Company fails to give the
notice specified below; or
(vi) the Applicant or any Restricted Subsidiary thereof fails to pay any
Indebtedness of the Applicant or any Restricted Subsidiary for borrowed money
within any applicable grace period after final maturity or after acceleration by
the holders thereof, if such Indebtedness is in excess of $5,000,000 at the
time; or
(vii) (A) the Applicant fails to comply with any of its representations,
warranties, covenants or agreements contained or incorporated by reference in
any Collateral Document (other than the New Senior Secured Notes Indenture) and
such failure continues beyond the applicable grace period provided in such
Collateral Document; (B) on or after the Effective Date, other than in
accordance with the provisions of the New Senior Secured Notes Indenture, for
any reason, other than the satisfaction in full and discharge of all obligations
secured thereby, any Collateral Document ceases to be or is not in full force
and effect or any Lien with respect to Collateral with a Fair Market Value that
exceeds $500,000 in the aggregate intended to be created by any Collateral
Document ceases to be or is not a valid and perfected first priority Lien for
more than 5 days; (C) the occurrence of any event of default under any
Collateral Document or (D) on or after the Effective Date, other than in
accordance with the provisions of the New Senior Secured Notes Indenture, the
Applicant asserts in writing that any Collateral Document has ceased to be or is
not in full force and effect; or
(viii) one or more judgments or decrees aggregating in excess of $5,000,000
is rendered against the Applicant or any Restricted Subsidiary and is not
discharged and either: (A) an enforcement proceeding has been commenced by any
creditor upon the judgment or decree or (B) there is a period of 60 days
following the entry of such judgment or decree during which such judgment or
decree is not discharged, waived or the execution thereof stayed; or
(ix) the Applicant or any Restricted Subsidiary pursuant to or within the
meaning of any Bankruptcy Law: (A) commences a voluntary case; (B) consents to
the entry of an order for relief against it in an involuntary case; (C) consents
to the appointment of a Custodian of it or any substantial part of its property;
or (D) makes a general assignment for the benefit of its creditors; or takes any
comparable action under any foreign laws relating to insolvency; or
(x) a court of competent jurisdiction enters an order for a decree under
any Bankruptcy Law that: (A) is for relief against the Applicant or any
Restricted Subsidiary in an involuntary case; (B) appoints a Custodian of the
Applicant or any Restricted Subsidiary or any substantial part of its property;
or (C) orders the winding up or liquidation of the Applicant or any Restricted
Subsidiary; or any similar relief is granted under any foreign laws and the
order or decree remains unstayed and in effect for 60 days.
A Default under clause (iv) or (v) above will not be an Event of Default
until the New Senior Secured Notes Indenture Trustee or the Holders of at least
25% in principal amount of the New Senior Secured Notes notify the Applicant of
the Default and the Applicant does not cure such Default within the time
specified after receipt of such notice. Such notice must specify the Default,
demand that it be remedied and state that such notice is a "Notice of Default."
The Applicant shall deliver to the New Senior Secured Notes Indenture
Trustee, within 30 days after the occurrence thereof, written notice in the form
of an Officers' Certificate of any event which, with the giving of notice and
the lapse of time, would become an Event of Default under clause (iv), (v), (vi)
or (viii) above, its status and what action the Applicant is taking or proposes
to take with respect thereto.
If an Event of Default (other than as specified in clauses (ix) and (x)
above) occurs and is continuing, the New Senior Secured Notes Indenture Trustee
by notice to the Applicant or the Holders of at least 25% in principal amount of
the New Senior Secured Notes by notice to the New Senior Secured Notes Indenture
Trustee (who shall promptly notify the Applicant), may declare the principal of
and accrued interest on all the New Senior Secured Notes to be due and payable.
Upon such declaration, such principal and interest will become due and payable
immediately. If an Event of Default specified in clause (ix) or (x) occurs, the
principal of and interest on all the New Senior Secured Notes shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the New Senior Secured Notes Indenture Trustee or any Holder of
the New Senior Secured Notes.
The Holders of a majority in principal amount of the New Senior Secured
Notes by notice to the New Senior Secured Notes Indenture Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely
because of acceleration. No such rescission shall affect any subsequent default
or impair any right consequent thereto.
The Holders of a majority in principal amount of the New Senior Secured
Notes by notice to the New Senior Secured Notes Indenture Trustee may waive an
existing Default and its consequences except (i) a Default or Event of Default
in the payment of the principal (other than principal due by reason of
acceleration) of or interest on any New Senior Secured Note or (ii) a Default or
Event of Default in respect of a provision that cannot be amended or waived
without the consent of each Holder affected by such amendment or waiver.
The Trust Indenture Act contains limitations on the rights of the New
Senior Secured Notes Indenture Trustee, should it become a creditor of the
Applicant or any guarantor, to obtain payment of claims in certain cases or to
realize on certain property received by it in respect of any such claims, as
security or otherwise. The New Senior Secured Notes Indenture Trustee is
permitted to engage in other transactions, provided that if it acquires any
conflicting interest it must eliminate such conflict upon the occurrence of an
Event of Default or resign.
(B) Authentication and Delivery of New Senior Secured Notes; Application of
Proceeds. The New Senior Secured Notes shall be signed by two officers of the
Applicant and the Applicant's seal shall be reproduced or imprinted on the New
Senior Secured Notes. A New Senior Secured Note shall not be valid until an
authorized signatory of the New Senior Secured Notes Indenture Trustee manually
signs the certificate of authentication on the New Senior Secured Note. Such
signature shall be conclusive evidence that the New Senior Secured Note has been
authenticated under the New Senior Secured Notes Indenture. The New Senior
Secured Notes Indenture Trustee may appoint an authenticating agent reasonably
acceptable to the Applicant to authenticate the New Senior Secured Notes. Unless
limited by the terms of such appointment, an authenticating agent may
authenticate New Senior Secured Notes whenever the New Senior Secured Notes
Indenture Trustee may do so. The New Senior Secured Notes shall be issuable in
fully registered form, without coupons, and in denominations of $1,000 or any
integral multiples thereof. There will be no cash proceeds to the Applicant upon
issuance of the New Senior Secured Notes.
(C) Release of Property Subject to Lien. The Applicant's obligations under
the New Senior Secured Notes Indenture are secured by a lien on substantially
all of the assets, real and personal, of the Applicant and its Subsidiaries,
including Accounts Receivable, Inventory and the proceeds thereof. The lien on
the pledged assets (the "Collateral") is held by a New Senior Secured Notes
Indenture Trustee pursuant to the Collateral Documents. The Collateral may be
released from the security interests with (or, in certain circumstances so long
as no Event of Default has occurred and is continuing, without) the New Senior
Secured Notes Indenture Trustee's consent pursuant to the terms of the New
Senior Secured Notes Indenture and the Collateral Documents.
Unless an Event of Default shall have occurred and be continuing, the
Applicant will be permitted to, at its option, obtain a release of any of the
collateral (including any Trust Monies other than Trust Monies which at such
time (i) constitute Excess Proceeds or (ii) have been deposited with the Paying
Agent in an amount sufficient to pay (A) the aggregate Change of Control
Purchase Price of all New Senior Secured Notes or portions thereof that are to
be purchased on the Change of Control Purchase Date or (B) the redemption price
of and accrued interest on all New Senior Secured Notes or portions thereof to
be redeemed on the redemption date in accordance with the requirements of the
New Senior Secured Notes) by subjecting other property, if such substitute
property has a Fair Market Value equal to or greater than the collateral to be
released (the "Substitute Collateral"), to the perfected first priority Lien of
the New Senior Secured Notes Indenture and the Collateral Documents or a similar
instrument in place of and in exchange for any of the Collateral to be released
upon receipt by the New Senior Secured Notes Indenture Trustee of certain
documentation, appraisals, an Opinion of Counsel, surveys (in certain cases) and
title insurance (in certain cases).
(D) Satisfaction and Discharge. The New Senior Secured Notes Indenture will
cease to be of further effect (except as expressly provided for in the New
Senior Secured Notes Indenture) when either (i) all outstanding New Senior
Secured Notes (other than lost, stolen or destroyed New Senior Secured Notes
which have been replaced) have been delivered to the New Senior Secured Notes
Indenture Trustee for cancellation or (ii) all outstanding New Senior Secured
Notes have become due and payable and the Applicant has irrevocably deposited
with the New Senior Secured Notes Indenture Trustee funds sufficient to pay at
maturity or upon redemption all outstanding New Senior Secured Notes, including
interest thereon (other than lost, stolen or destroyed New Senior Secured Notes
which have been replaced) and, in either case, the Company has paid all sums
payable under the New Senior Secured Notes Indenture. The New Senior Secured
Notes Indenture Trustee is required to acknowledge satisfaction and discharge of
the New Senior Secured Notes Indenture on demand of the Applicant accompanied by
an Officer's Certificate and an Opinion of Counsel at the cost and expense of
the Applicant.
(E) Evidence of Covenant Compliance. Upon any request or application by the
Applicant to the New Senior Secured Notes Indenture Trustee to take or refrain
from taking any action under the New Senior Secured Notes Indenture, the
Applicant shall furnish to the New Senior Secured Notes Indenture Trustee:
(1) an Officers' Certificate in form and substance reasonably satisfactory
to the New Senior Secured Notes Indenture Trustee stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this New
Senior Secured Notes Indenture relating to the proposed action have been
complied with; and
(2) an Opinion of Counsel in form and substance reasonably satisfactory to
the New Senior Secured Notes Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
New Senior Subordinated Notes Indenture
(A) Events of Default
An Event of Default will occur under the New Senior Subordinated Notes
Indenture if:
(i) the Applicant fails to make any payment of interest on any New Senior
Subordinated Note when it becomes due and payable, and such failure continues
for a period of 30 days; or
(ii) the Applicant fails to (A) make the payment of the principal of (or
premium, if any, on) any New Senior Subordinated Note when it becomes due and
payable at maturity, upon acceleration, redemption or declaration, or otherwise
or (B) redeem or purchase New Senior Subordinated Notes when required pursuant
to the New Senior Subordinated Notes Indenture; or
(iii) the Applicant fails to comply with Article 5 of the New Senior
Subordinated Notes Indenture relating to the consolidation, merger or sale of
the Applicant or any Restricted Subsidiary's assets into a successor company; or
(iv) The Applicant or any Restricted Subsidiary fails to comply with
certain covenants relating to, among other things, the filing of appropriate SEC
reports, the incurrence of additional indebtedness, the incurrence of Restricted
Subsidiary indebtedness and the issuance of preferred stock, the making of
certain restricted payments, restrictions on certain distributions from
Restricted Subsidiaries to the Applicant, the sale of assets and Restricted
Subsidiary stock, transactions with affiliates, a change of control, the
creation of liens by any Restricted Subsidiary, sale/leaseback transactions, and
the issuance or sale of the capital stock of Restricted Subsidiaries (other than
a failure to purchase New Senior Subordinated Notes when required pursuant to
covenants governing the sale of assets and Restricted Subsidiary stock, and a
change of control) and such failure continues for 30 days after the notice
specified below, or the Applicant fails to give the notice specified below; or
(v) The Applicant fails to comply with any of its covenants and agreements
under the New Senior Subordinated Notes Indenture or the New Senior Subordinated
Notes (other than those referred to in clause (i), (ii), (iii) or (iv) above)
and such failure continues for a period of 60 days after the notice specified
below or the Applicant fails to give the notice specified below; or
(vi) the Applicant fails to pay any Indebtedness of the Applicant or any
Restricted Subsidiary within any applicable grace period after final maturity or
after acceleration by the Holders of the New Senior Subordinated Notes, if such
Indebtedness is in excess of $7,500,000; or
(vii) one or more judgments or decrees aggregating in excess of $7,500,000
is rendered against the Applicant or any Restricted Subsidiary and is not
discharged and either: (A) an enforcement proceeding has been commenced by any
Creditor upon such judgment or decree or (B) there has been a period of 60 days
following the entry of such judgment or decree during which such judgment or
decree is not discharged, waived or the execution thereof stayed; or
(viii) the Applicant or any Restricted Subsidiary pursuant to or within the
meaning of any Bankruptcy Law: (A) commences a voluntary case; (B) consents to
the entry of an order for relief against it in an involuntary case; (C) consents
to the appointment of a Custodian for all or any substantial part of its
property; or (D) makes a general assignment for the benefit of its creditors; or
takes any comparable action under any foreign laws relating to insolvency; or
(ix) a court of competent jurisdiction enters a decree or order under any
Bankruptcy Law that (A) is for relief against the Applicant, or any Restricted
Subsidiary in an involuntary case; (B) appoints a Custodian of the Applicant or
any Restricted Subsidiary for it or any substantial part of its property; or (C)
orders the winding up or liquidation of the Applicant or any Restricted
Subsidiary; or any similar relief is granted under any foreign laws and the
order or decree remains unstayed and in effect for 60 days.
A Default under clause (iv) or (v) above is not an Event of Default until
the New Senior Subordinated Notes Indenture Trustee or the Holders of at least
25% in principal amount of the New Senior Subordinated Notes notify the
Applicant of the Default and the Applicant does not cure such Default within the
time specified after the receipt of such notice. Such notice must specify the
Default, demand that it be remedied and state that such notice is a "Notice of
Default."
The Applicant shall deliver to the New Senior Subordinated Notes Indenture
Trustee, within 30 days after the occurrence thereof, written notice in the form
of an Officers' Certificate of any event which with the giving of notice and the
lapse of time would become an Event of Default under clause (iv), (v), (vi) or
(vii) above, its status and what action the Applicant is taking or proposes to
take with respect thereto.
If an Event of Default (other than as specified in clauses (viii) and (ix)
above) occurs and is continuing, the New Senior Subordinated Notes Indenture
Trustee or the Holders of at least 25% in principal amount of the New Senior
Subordinated Notes by a notice to the New Senior Subordinated Notes Indenture
Trustee (who shall promptly notify the Applicant), may declare the principal of,
and accrued interest on, all the New Senior Subordinated Notes thereon to be due
and payable. Upon such declaration, such amount shall become due and payable
immediately. If an Event of Default specified in clause (viii) or (ix) above
occurs and is continuing, the principal of and interest on all the New Senior
Subordinated Notes shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the New Senior Subordinated
Notes Indenture Trustee or any Holder of New Senior Subordinated Notes.
The Holders of a majority in principal amount of the New Senior
Subordinated Notes by notice to the New Senior Subordinated Notes Indenture
Trustee may rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
The Holders of a majority in principal amount of the New Senior
Subordinated Notes by notice to the New Senior Subordinated Notes Indenture
Trustee may waive an existing Default and its consequences except (i) a Default
or Event of Default in the payment of the principal of or interest on any New
Senior Subordinated Note or (ii) a Default or Event of Default in respect of a
provision that under the New Senior Subordinated Notes Indenture cannot be
amended without the consent of the Holder of each New Senior Subordinated Note
affected by such amendment.
The Trust Indenture Act contains limitations on the rights of the New
Senior Subordinated Notes Indenture Trustee, should it become a creditor of the
Applicant or any guarantor, to obtain payment of claims in certain cases or to
realize on certain property received by it in respect of any such claims, as
security or otherwise. The New Senior Subordinated Notes Indenture Trustee is
permitted to engage in other transactions, provided that if it acquires any
conflicting interest it must eliminate such conflict upon the occurrence of an
Event of Default or resign.
(B) Authentication and Delivery of New Senior Fixed Rate Notes; Application
of Proceeds. The New Senior Subordinated Notes will be signed by two officers of
the Applicant and the Applicant's seal shall be reproduced or imprinted on the
New Senior Subordinated Notes. A New Senior Subordinated Note shall not be valid
until an authorized signatory of the New Senior Subordinated Notes Indenture
Trustee manually signs the certificate of authentication on the New Senior
Subordinated Note. Such signature shall be conclusive evidence that the New
Senior Subordinated Note has been authenticated under the New Senior
Subordinated Notes Indenture. The New Senior Subordinated Notes Indenture
Trustee may appoint an authenticating agent reasonably acceptable to the
Applicant to authenticate New Senior Subordinated Notes. Unless limited by the
terms of such appointment, an authenticating agent may authenticate New Senior
Subordinated Notes whenever the New Senior Subordinated Notes Indenture Trustee
may do so. The New Senior Subordinated Notes shall be issuable in fully
registered form, without coupons, in denominations of $1,000 or any integral
multiples thereof. There will be no cash proceeds to the Applicant upon issuance
of the New Senior Subordinated Notes.
(C) Satisfaction and Discharge. The New Senior Subordinated Note Indenture
will cease to be of further effect (except as expressly provided for in the New
Senior Subordinated Notes Indenture) when either (i) all outstanding New Senior
Subordinated Notes (other than lost, stolen or destroyed New Senior Subordinated
Notes which have been replaced) have been delivered to the New Senior
Subordinated Notes Indenture Trustee for cancellation or (ii) all outstanding
New Senior Subordinated Notes have become due and payable and the Applicant has
irrevocably deposited with the New Senior Subordinated Notes Indenture Trustee
funds sufficient to pay at maturity or upon redemption all outstanding New
Senior Subordinated Notes, including interest thereon (other than lost, stolen
or destroyed New Senior Subordinated Notes which have been replaced) and, in
either case, the Applicant has paid all sums payable under the New Senior
Subordinated Note Indenture. The New Senior Subordinated Notes Indenture Trustee
is required to acknowledge satisfaction and discharge of the New Senior
Subordinated Notes Indenture on demand of the Applicant accompanied by an
Officer's Certificate and an Opinion of Counsel at the cost and expense of the
Applicant.
(D) Evidence of Covenant Compliance. Upon any request or application by the
Applicant to the New Senior Subordinated Notes Indenture Trustee to take or
refrain from taking any action under this Indenture, the Applicant shall furnish
to the New Senior Subordinated Notes Indenture Trustee:
(1) an Officers' Certificate in form and substance reasonably satisfactory
to the New Senior Subordinated Notes Indenture Trustee stating that, in the
opinion of the signers, all conditions precedent, if any, provided for in this
New Senior Subordinated Notes Indenture relating to the proposed action have
been complied with; and
(2) an Opinion of Counsel in form and substance reasonably satisfactory to
the New Senior Subordinated Notes Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Contents of application for qualification. This application for
qualification comprises:
(a) Pages numbered ___ to ___, consecutively.
(b) The statements of eligibility and qualification of the New Senior
Secured Notes Indenture Trustee and the New Senior Subordinated Notes Indenture
Trustee under the Indentures to be qualified, respectively.
(c) The following exhibits in addition to those filed as part of the
statement of eligibility and qualification of the trustees:
Exhibit T3A.1 Restated Articles of Incorporation of the Applicant, as
amended, currently in effect. (2)
Exhibit T3A.2 Form of New Certificate of Incorporation of the reorganized
Applicant. (3)
Exhibit T3B.1 Existing Restated Bylaws of the Applicant. (4)
Exhibit T3B.2 Form of New Bylaws of the reorganized Applicant. (3)
Exhibit T3C.1 Form of New Senior Secured Notes Indenture to be qualified
(including the form of New Senior Secured Note).
Exhibit T3C.2 Form of New Senior Subordinated Notes Indenture to be
qualified (including the form of New Senior Subordinated Notes).
Exhibit T3D Copy of the Confirmation Order of the United States Bankruptcy
Court for the District of Delaware. (3)
Exhibit T3E.1 Second Amended Joint Plan of Reorganization, dated March 28,
1996 (including the appendices and exhibits attached thereto). (5)
Exhibit T3E.2 Disclosure Statement, dated March 28, 1996 (including the
appendices and exhibits attached thereto). (6)
Exhibit T3E.3 Form of Ballot sent to the prospective holders of the New
Secured Notes.
Exhibit T3E.4 Form of Ballot sent to the prospective holders of the New
Senior Subordinated Notes.
Exhibit T3E.5 Form of Letter of Transmittal sent to the prospective holders
of the New Secured Notes. (3)
Exhibit T3E.6 Form of Letter of Transmittal sent to the prospective holders
of the New Senior Subordinated Notes. (3)
Exhibit T3E.7 Letter, dated March 28, 1996, by the President and Chief
Executive Officer of the Applicant.
Exhibit T3E.8 Letter, dated March 28, 1996, to the Unsecured Creditors of
the Applicant from the Counsel for the Official Committee of Unsecured
Creditors.
Exhibit T3F.1 Cross-reference sheet for the New Senior Secured Notes
Indenture to be qualified.
Exhibit T3F.2 Cross-reference sheet for the New Senior Subordinated Notes
Indenture to be qualified.
- --------------------------------------------------
2 Incorporated by reference to Exhibit 3 to the Applicant's Form 10-K for
the fiscal year ended September 30, 1992 (file no. 1-8328).
3 To be filed by amendment.
4 Incorporated by reference to Exhibit 3(a) to the Applicant's Form 8-K
dated January 31, 1990 (file no. 1-8328).
5 Incorporated by reference to Exhibit (a)(2) to the Applicant's Schedule
14D-9, filed with the Securities and Exchange Commission on May 3, 1996 (file
no. 1-8328).
6 Incorporated by reference to Exhibit (a)(3) to the Applicant's Schedule
14D-9, filed with the Securities and Exchange Commission on May 3, 1996 (file
no. 1-8328).
<PAGE>
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Applicant, Anacomp, Inc., a corporation organized and existing under the laws of
the State of Indiana, has duly caused this application to be signed on its
behalf by the undersigned, thereunto duly authorized, and its seal to be
hereunto affixed and attested, all in the City of Indianapolis, and State of
Indiana, on the 30th day of April, 1996.
(SEAL) ANACOMP, INC.
By: /s/ Donald L. Viles
Name: Donald L. Viles
Title: Executive Vice President
& Chief Executive Officer
Attest: /s/ Nancy A. Vandeventer
By: Nancy A. Vandeventer
Assistant Secretary
<PAGE>
INDEX TO EXHIBITS
----------------------- ----------------------------------------------------
Exhibit
Number Description
Exhibit T3A.1 Restated Articles of Incorporation of the Applicant,
as amended, currently in effect.2
Exhibit T3A.2 Form of New Amended and Restated Certificate of
Incorporation of the reorganized Applicant.3
Exhibit T3B.1 Existing Restated Bylaws of the Applicant.4
Exhibit T3B.2 Form of New Amended and Restated Bylaws of the
reorganized Applicant.3
Exhibit T3C.1 Form of New Senior Secured Notes Indenture to be
qualified (including the form of New Senior Secured
Note).
Exhibit T3C.2 Form of New Senior Subordinated Notes Indenture
to be qualified (including the form of New Senior
Subordinated Notes).
Exhibit T3D Copy of the Confirmation Order of the United States
Bankruptcy Court for the District of Delaware. (3)
Exhibit T3E.1 Second Amended Joint Plan of Reorganization,
dated March 28, 1996 (including the appendices and
exhibits attached thereto). (5)
Exhibit T3E.2 Disclosure Statement, dated March 28, 1996 (including
the appendices and exhibits attached thereto). (5)
Exhibit T3E.3 Form of Ballot sent to the prospective holders of the
New Secured Notes.
ExhibitT3E.4 Form of Ballot sent to the prospective holders of
the New Senior Subordinated Notes.
Exhibit T3E.5 Form of Letter of Transmittal sent to the prospective
holders of the New Secured Notes. (3)
Exhibit T3E.6 Form of Letter of Transmittal sent to the prospective
holders of the New Senior Subordinated Notes. (3)
Exhibit T3E.7 Letter, dated March 28, 1996, by the President
and Chief Executive Officer of the Applicant.
Exhibit T3E.8 Letter, dated March 28, 1996, to the Unsecured
Creditors of the Applicant from the Counsel for the
Official Committee of Unsecured Creditors.
Exhibit T3F.1 Cross-reference sheet for the New Senior Secured
Notes Indenture to be qualified.
Exhibit T3F.2 Cross-reference sheet for the New Senior
Subordinated Notes Indenture to be qualified.
-------------------
(2) Incorporated by reference from the Applicant's Form 10-K for the fiscal
year ended September 30, 1992 (file no. 1-8328).
(3) To be filed by amendment.
(4) Incorporated by reference from the Applicant's Form 8-K dated ended
January 31, 1990 (file no. 1-8328).
(5) The Second Amended Joint Plan of Reorganization and the Disclosure
Statement were filed as Exhibits (a)(2) and (a)(3), respectively, to the
Applicant's Schedule 14D-9, dated May 2, 1996, as filed with the Securities and
Exchange Commission on May 3, 1996 (file no. 1-8328) and are incorporated by
reference herein.
OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF
KALVAR MICROFILM, INC., ANACOMP, INC.,
ANACOMP INTERNATIONAL N.V., FLORIDA A A C CORPORATION
AND XIDEX DEVELOPMENT COMPANY
March 28, 1996
To: All Unsecured Creditors of Anacomp, Inc., et al.
As the appointed representative of all general unsecured creditors of
Kalvar Microfilm, Inc., Anacomp, Inc., Anacomp International N.V., Florida A A C
Corporation and Xidex Development Company (the "Debtors") in these chapter 11
reorganization proceedings, the Official Committee of Unsecured Creditors (the
"Creditors' Committee") has participated in lengthy, complicated negotiations
culminating in the Debtors' Second Amended Joint Plan of Reorganization (the
"Plan") on which you are being asked to vote. THE CREDITORS' COMMITTEE
RECOMMENDS THAT YOU VOTE FOR THE PLAN BY SIGNING AND RETURNING THE ENCLOSED
BALLOT.
This communication is being distributed for informational purposes together
with the Disclosure Statement pursuant to Section 1125 of the Bankruptcy Code
for the Second Amended Joint Plan of Reorganization of Anacomp, Inc. and Certain
of Its Subsidiaries (the "Disclosure Statement") and Plan filed with the United
States Bankruptcy Court for the District of Delaware, as well as a copy of a
ballot for registering your acceptance or rejection of the Plan. This
communication is not intended to be a replacement for or summary of the
Disclosure Statement. All creditors are strongly encouraged to carefully read
the Plan and Disclosure Statement before submitting their ballots.
As more fully described in the accompanying Disclosure Statement, the 15%
Senior Subordinated Notes due 2000 (the "Old Senior Subordinated Notes") are
classified in Class 5, the 13.875% Convertible Subordinated Debentures due 2002
(the "Old 13.875% Subordinated Debentures") and the 9% Convertible Subordinated
Debentures due 1996 (the "Old 9% Subordinated Debentures") are classified in
Class 6, and general unsecured creditors, including trade creditors, are
classified in Class 7.
UNSECURED CREDITOR DISTRIBUTIONS
The enclosed Disclosure Statement sets forth in detail the treatment of all
classes of creditors and shareholders under the Plan, as well as a history of
significant events in the Debtors' Chapter 11 cases. Defined terms used herein
are defined as in the Plan.
Class 4
The following will be distributed to the holder of a Carlisle Note Claim:
a New Carlisle Note in the amount of $2,615,760.
<PAGE>
Class 5
The following will be distributed pro rata to holders of Old Senior
Subordinated Notes:
$160 million in New Senior Subordinated Notes; and
9,250,000 shares of the New Common Stock.
Class 6
The following will be distributed pro rata to the holders of Old 13.875%
Subordinated Debentures and Old 9% Subordinated Debentures:
750,000 shares of the New Common Stock; and
259,068 New Warrants.
Class 7
Each holder of an Allowed General Unsecured Claim will receive: (i) Cash
equal to the amount of such Claim; (ii) satisfaction by performance; (iii) other
payment or satisfaction as agreed by such holder and the Debtors; or such other
treatment as will render such claim unimpaired.
The Creditors' Committee, together with its legal advisors, Stroock &
Stroock & Lavan, and its financial advisors, Chanin & Company, has participated
in extensive due diligence and negotiations with the Debtors and the other major
creditor constituencies. The Plan represents the negotiated resolutions of these
discussions. THE CREDITORS' COMMITTEE BELIEVES THE PLAN ACHIEVES THE GOAL OF
MAXIMIZING THE RECOVERY FOR ALL UNSECURED CREDITORS OF THE DEBTORS AND,
THEREFORE, URGES YOU TO RETURN YOUR BALLOT WITH A VOTE ACCEPTING THE PLAN.
Sincerely yours,
STROOCK & STROOCK & LAVAN
Counsel for The Official Committee
of Unsecured Creditors
By /s/ DANIEL H. GOLDEN
--------------------
DANIEL H. GOLDEN
-2-
OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF
KALVAR MICROFILM, INC., ANACOMP, INC.,
ANACOMP INTERNATIONAL N.V., FLORIDA A A C CORPORATION
AND XIDEX DEVELOPMENT COMPANY
March 28, 1996
To: All Unsecured Creditors of Anacomp, Inc., et al.
As the appointed representative of all general unsecured creditors of
Kalvar Microfilm, Inc., Anacomp, Inc., Anacomp International N.V., Florida A A C
Corporation and Xidex Development Company (the "Debtors") in these chapter 11
reorganization proceedings, the Official Committee of Unsecured Creditors (the
"Creditors' Committee") has participated in lengthy, complicated negotiations
culminating in the Debtors' Second Amended Joint Plan of Reorganization (the
"Plan") on which you are being asked to vote. THE CREDITORS' COMMITTEE
RECOMMENDS THAT YOU VOTE FOR THE PLAN BY SIGNING AND RETURNING THE ENCLOSED
BALLOT.
This communication is being distributed for informational purposes together
with the Disclosure Statement pursuant to Section 1125 of the Bankruptcy Code
for the Second Amended Joint Plan of Reorganization of Anacomp, Inc. and Certain
of Its Subsidiaries (the "Disclosure Statement") and Plan filed with the United
States Bankruptcy Court for the District of Delaware, as well as a copy of a
ballot for registering your acceptance or rejection of the Plan. This
communication is not intended to be a replacement for or summary of the
Disclosure Statement. All creditors are strongly encouraged to carefully read
the Plan and Disclosure Statement before submitting their ballots.
As more fully described in the accompanying Disclosure Statement, the 15%
Senior Subordinated Notes due 2000 (the "Old Senior Subordinated Notes") are
classified in Class 5, the 13.875% Convertible Subordinated Debentures due 2002
(the "Old 13.875% Subordinated Debentures") and the 9% Convertible Subordinated
Debentures due 1996 (the "Old 9% Subordinated Debentures") are classified in
Class 6, and general unsecured creditors, including trade creditors, are
classified in Class 7.
UNSECURED CREDITOR DISTRIBUTIONS
The enclosed Disclosure Statement sets forth in detail the treatment of all
classes of creditors and shareholders under the Plan, as well as a history of
significant events in the Debtors' Chapter 11 cases. Defined terms used herein
are defined as in the Plan.
Class 4
The following will be distributed to the holder of a Carlisle Note Claim:
a New Carlisle Note in the amount of $2,615,760.
<PAGE>
Class 5
The following will be distributed pro rata to holders of Old Senior
Subordinated Notes:
$160 million in New Senior Subordinated Notes; and
9,250,000 shares of the New Common Stock.
Class 6
The following will be distributed pro rata to the holders of Old 13.875%
Subordinated Debentures and Old 9% Subordinated Debentures:
750,000 shares of the New Common Stock; and
259,068 New Warrants.
Class 7
Each holder of an Allowed General Unsecured Claim will receive: (i) Cash
equal to the amount of such Claim; (ii) satisfaction by performance; (iii) other
payment or satisfaction as agreed by such holder and the Debtors; or such other
treatment as will render such claim unimpaired.
The Creditors' Committee, together with its legal advisors, Stroock &
Stroock & Lavan, and its financial advisors, Chanin & Company, has participated
in extensive due diligence and negotiations with the Debtors and the other major
creditor constituencies. The Plan represents the negotiated resolutions of these
discussions. THE CREDITORS' COMMITTEE BELIEVES THE PLAN ACHIEVES THE GOAL OF
MAXIMIZING THE RECOVERY FOR ALL UNSECURED CREDITORS OF THE DEBTORS AND,
THEREFORE, URGES YOU TO RETURN YOUR BALLOT WITH A VOTE ACCEPTING THE PLAN.
Sincerely yours,
STROOCK & STROOCK & LAVAN
Counsel for The Official Committee
of Unsecured Creditors
By /s/ DANIEL H. GOLDEN
--------------------
DANIEL H. GOLDEN
-2-
[BLUE BALLOT]
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: ) Chapter 11
)
KALVAR MICROFILM, INC., ) Case No. 96-15 (HSB)
ANACOMP, INC., ANACOMP )
INTERNATIONAL N.V., FLORIDA )
A A C CORPORATION and ) Jointly Administered
XIDEX DEVELOPMENT COMPANY, )
)
Debtors. )
MASTER BALLOT FOR ACCEPTING OR REJECTING THE DEBTORS'
SECOND AMENDED JOINT PLAN OF REORGANIZATION FOR 12.25%
SERIES B SENIOR NOTES DUE 1997 (THE "OLD SENIOR NOTES")
PLEASE READ AND FOLLOW THE ATTACHED INSTRUCTIONS CAREFULLY. PLEASE
COMPLETE, SIGN AND DATE THIS MASTER BALLOT AND RETURN IT IN THE ENCLOSED
PRE-ADDRESSED ENVELOPE TO LOGAN & COMPANY, INC. (THE "BALLOT AGENT") AT 615
WASHINGTON STREET, HOBOKEN, NEW JERSEY 07030. IF THIS MASTER BALLOT HAS NOT BEEN
RECEIVED BY THE BALLOT AGENT BY 4:30 P.M., EASTERN DAYLIGHT TIME (NEW YORK CITY
TIME), ON MAY 8, 1996 (THE "VOTING DEADLINE"), YOUR VOTE AND/OR THE VOTES OF THE
BENEFICIAL HOLDERS FOR WHOM YOU HOLD THE OLD SENIOR NOTES AS REGISTERED OWNER
WILL NOT BE COUNTED. THEREFORE, YOU MUST ALLOW ADDITIONAL TIME.
This Ballot may not be used for any purpose other than for casting votes to
accept or reject the Debtors' Second Amended Joint Plan of Reorganization (the
"Plan") under Chapter 11 of the United States Bankruptcy Code of Anacomp, Inc.,
Anacomp International N.V., Kalvar Microfilm, Inc., Florida A A C Corporation
and Xidex Development Company. Each term that is initially capitalized herein
and not defined herein shall have the meaning ascribed to such term in the Plan.
This Master Ballot is to be used by any party which owns Old Senior Notes
for its own account and by any broker, proxy intermediary or other registered
holder or nominee for transmitting the votes cast by or on behalf of the owners
of a beneficial interest (the "Beneficial Holders") in the Old Senior Notes as
of March 28, 1996 (the "Ballot Record Date"). If you are also a Beneficial
Holder of any Old Senior Notes, please see the attached Instructions.
The Plan can be confirmed by the Bankruptcy Court and thereby made binding
on all holders of the Old Senior Notes, if it is accepted by the holders of
two-thirds in dollar amount and more than one-half in number of the allowed
claims voted in each class of claims voting on the Plan. In the event the
requisite acceptances are not obtained, the Bankruptcy Court may nevertheless
confirm the Plan if the Bankruptcy Court finds that the Plan accords fair and
equitable treatment to the class or classes rejecting it and otherwise satisfies
the requirements of Section 1129(b) of the United States Bankruptcy Code. TO
HAVE YOUR VOTES AND/OR THE VOTES OF YOUR CUSTOMERS COUNT, YOU MUST COMPLETE,
SIGN, AND TIMELY RETURN THIS MASTER BALLOT. BALLOTS WHICH ARE NOT SIGNED WILL
NOT BE COUNTED.
Item 1: Aggregate principal amount of the Old Senior Notes as to which
votes are cast.
The undersigned certifies that it (please check the applicable box(es)):
[ ] is the registered owner ("Registered Owner") AND the
Beneficial Holder of the following aggregate principal
amount(s) of the Old Senior Notes as of the Ballot Record Date
in its own name or through a position held at a securities
depository;
[ ] is the Registered Owner AND NOT the Beneficial Holder of the
following aggregate principal amount(s) of the Old Senior
Notes as of the Ballot Record Date in its own name or through
a position held at a securities depository; or
[ ] is acting under a power of attorney or proxy granted by the
Registered Owner of the following aggregate principal
amount(s) of the Old Senior Notes.
Bond Number(s) Principal Amount
1. __________ $ __________
2. __________ $ __________
3. __________ $ __________
4. __________ $ __________
5. __________ $ __________
6. __________ $ __________
Please attach additional pages as necessary.
[ ] Additional pages are attached
[ ] Additional pages are not attached
Item 2: Vote -- Aggregate Principal Amount of the Old Senior Notes.
If the undersigned is the Registered Owner AND NOT the Beneficial Holder of
the aggregate principal amount of Old Senior Notes set forth in Item 1 above,
the undersigned, as authorized and instructed by the Beneficial Holders of such
Old Senior Notes, transmits the following votes of such Beneficial Holders in
respect of their Old Senior Notes:
ACCEPT THE PLAN: $________________
Aggregate Principal Amount of
the Old Senior Notes
REJECT THE PLAN: $_________________
Aggregate Principal Amount of
the Old Senior Notes
If the undersigned is both the Registered Owner AND the Beneficial Holder
of the principal amount of the Old Senior Notes set forth in Item 1 above, the
undersigned votes to (please check one):
[ ] ACCEPT THE PLAN
[ ] REJECT THE PLAN
If this Ballot does not indicate either an acceptance or a rejection or
indicates both an acceptance and a rejection of the Plan, your vote will not be
counted.
Item 3: Vote -- Number of Beneficial Holders of Old Senior Notes.
(This section does not apply to Old Senior Notes for which the undersigned
is both Registered Owner AND Beneficial Holder.)
The undersigned, as the Registered Owner and not the Beneficial Holder of
the Old Senior Notes, certifies that this summary is a true and accurate
schedule of the ____ Ballots that have been cast by the following Beneficial
Holders of Old Senior Notes, as identified by their respective customer account
numbers, which delivered to the undersigned _____ Ballots casting votes to
accept the Plan and _____ Ballots casting votes to reject the Plan, as set forth
in further detail below (indicate the aggregate principal amount for each
respective account under the appropriate column):
Principal Amount of the Old Senior Notes
Name and/or Account Number of
Each Beneficial Holder To Accept The Plan To Reject The Plan
1. ___________________________ $___________ $____________
2. ___________________________ $___________ $____________
3. ___________________________ $___________ $____________
4. ___________________________ $___________ $____________
5. ___________________________ $___________ $____________
Total Number of Beneficial Total Accepting: Total Rejecting:
Holders_____________ $_____________ $_____________
Please attach additional pages as necessary.
[ ] Additional pages are attached
[ ] Additional pages are not attached
Item 4: Certification as to the Old Senior Notes.
By returning this Ballot, the undersigned certifies that the Registered
Owner and/or the Beneficial Holder has not submitted additional Ballots for the
Old Senior Notes identified in Item 1, except as specified in the table
immediately below, to the undersigned. If applicable to you, please provide the
information required by this Item 4 in the following table (please use
additional sheets of paper if necessary):
Name of Registered Account Principal
Holder or Nominee* Number** Amount
________________________ __________ $ __________
________________________ __________ $ __________
________________________ __________ $ __________
________________________ __________ $ __________
________________________ __________ $ __________
* Insert your name if the Old Senior Notes are held by you in record name,
or, if held in street name, insert name of broker or bank (or agent thereof)
through which you own the Old Senior Notes.
** Please indicate the account number of the broker or bank where the
account is held.
Item 5: The undersigned understands that if it signs this Ballot without
indicating the principal amount of the Old Senior Notes rejecting or accepting
the Plan in Item 2 above, the entire aggregate amount of Old Senior Notes set
forth on Item 1 above will not be counted.
Item 6: Certifications.
(a) By signing this Master Ballot, the undersigned certifies that each
Beneficial Holder of an Old Senior Note whose vote is being transmitted by this
Master Ballot has been provided with a copy of the Disclosure Statement (as
defined in the instructions hereto), a Ballot and all related solicitation
materials, including the exhibits to the Disclosure Statement. The undersigned
further certifies that if it is the Registered Owner and not the Beneficial
Holder of the Old Senior Notes, a record of the voting instructions received
from each Beneficial Holder will remain on file with the undersigned.
(b) By signing this Master Ballot, the undersigned certifies that, as
indicated in Item 1, it (a) is the Registered Owner and the Beneficial Holder of
the aggregate principal amount of the Old Senior Notes set forth in Item 1, (b)
is the Registered Owner and not the Beneficial Holder of the aggregate principal
amount of the Old Senior Notes set forth in Item 1, or (c) is acting under a
power of attorney or proxy granted by the Registered Owner of the aggregate
principal amount of the Old Senior Notes set forth in Item 1, and, accordingly,
has full power and authority to vote to accept or reject the Plan. The
undersigned also acknowledges that this solicitation is governed by all the
terms and conditions of the Plan and the description thereof in the Disclosure
Statement.
(c) By signing this Master Ballot, the undersigned certifies that it is
understood that if this Ballot or the Ballots returned by Beneficial Holders are
returned by facsimile, are unsigned, are illegible, indicate both an acceptance
and rejection of the Plan, or fails to indicate a vote either to accept or
reject the Plan, such Ballots will not be counted.
(d) By signing this Master Ballot, the undersigned certifies that it is
understood that if the undersigned signs this Ballot, and votes to reject or
accept the Plan, without indicating the principal amount of the Old Senior Notes
rejecting or accepting the Plan, this Ballot will not be counted.
(e) The undersigned certifies that it has transcribed the information, if
any, provided in Item 3 of each Ballot received from each Beneficial Holder of
Old Senior Notes.
Name of (a) Registered Owner, (b)
Beneficial Holder, (c) Power of
Attorney or Proxy Holder:
________________________________________
(Print or Type)
Social Security or Federal
Tax ID No. (Optional) _____________________________________
Depository Participant Number _____________________________
Signature: ________________________________________________
Print Name of Signatory: __________________________________
By: _______________________________________________________
(If Applicable)
Title: ____________________________________________________
(If Applicable)
Address: __________________________________________________
___________________________________________________________
City, State and Zip Code
Telephone Number: (____) _________________________________
Date Completed: ___________________________________________
SEE ATTACHED VOTING INSTRUCTIONS
INSTRUCTIONS FOR COMPLETING THE MASTER BALLOT
Anacomp, Inc., Anacomp International N.V., Kalvar Microfilm, Inc., Florida
A A C Corporation and Xidex Development Company (the "Debtors") are soliciting
(a) your votes, if you are both the Registered Owner and Beneficial Holder of
the Old Senior Notes, or (b) the votes of your Beneficial Holders of the Old
Senior Notes, if you are either the Registered Owner or acting under a power of
attorney or proxy granted by the Registered Owner and not the Beneficial Holder
of the Old Senior Notes with respect to the Debtors' proposed Second Amended
Joint Plan of Reorganization under Chapter 11 of the United States Bankruptcy
Code dated March 28, 1996 (the "Plan"), a copy of which is attached to the
accompanying disclosure statement dated March 28, 1996 (the "Disclosure
Statement"). Please review the Disclosure Statement and exhibits thereto
carefully before you vote.
This Master Ballot is to be used by (i) any broker, proxy intermediary or
other nominee who is a Registered Owner of Old Senior Notes on the Ballot Record
Date or is acting by authority of such Registered Owner and is recording,
summarizing and transmitting votes cast to accept or reject the Plan by or on
behalf of the Beneficial Holders of the Old Senior Notes for whom you are the
Registered Owner/nominee, or (ii) any party which is both the Registered Owner
and Beneficial Holder of the Old Senior Notes on the Ballot Record Date.
If you are the Registered Owner and NOT THE Beneficial Holder of the Old
Senior Notes, you should deliver the Beneficial Holder Ballot and other
documents relating to the Plan, including the Disclosure Statement and the
exhibits thereto (collectively, the "Solicitation Materials"), to each
Beneficial Holder of the Old Senior Notes and take any action required to enable
each such Beneficial Holder to vote the Old Senior Notes owned by such
Beneficial Holder. With regard to any Beneficial Holder Ballots returned to you,
you must (a) retain such Beneficial Holder Ballots in your files for one year
and transfer the requested information from each such Beneficial Holder Ballot
onto the attached Master Ballot, (b) execute the Master Ballot, and (c) arrange
for delivery of such Master Ballot to the Ballot Agent. Please keep any records
of the voting instructions received from Beneficial Holders, including all
Beneficial Holder Ballots.
If you are both the Registered Owner and Beneficial Holder of the Old
Senior Notes, you must complete, execute and return this Ballot directly to the
Ballot Agent to vote such Old Senior Notes.
Multiple Master Ballots may be completed and delivered to the Ballot Agent.
Votes reflected by these multiple Master Ballots will be counted except to the
extent that they are duplicative of other Master Ballots. If two or more Master
Ballots timely received by the Ballot Agent are inconsistent, to the extent the
later Master Ballot seeks to change or withdraw a vote cast in a prior Master
Ballot, such votes cast may only be changed or withdrawn with approval of the
Bankruptcy Court. If more than one Master Ballot is timely submitted and the
later Master Ballot(s) contain(s) the words "Additional Vote" or such other
language as is customarily used to indicate an additional vote, that Master
Ballot will not revoke an earlier vote and will be counted as an additional
vote.
If You Are the Registered Owner AND NOT the Beneficial Holder, To Properly
Complete the Master Ballot, You Must Follow These Instructions:
1. Provide appropriate information for each of the items on the Master
Ballot. Please note that Item 3 requests information which is set forth in the
Ballots received by you from each individual Beneficial Holder for whom you hold
Old Senior Notes in your name. To identify such Beneficial Holders without
disclosing their names, please use the customer account number assigned by you
to each such Beneficial Holder or, if no such customer account number exists,
please use the numbers you have assigned internally to identify such Beneficial
Holder (making sure to retain a separate list of each Beneficial Holder and his
or her assigned number). If additional information is provided by such
Beneficial Holders in Item 3 of the Ballots received by you from such Beneficial
Holders, please provide such information at Item 4 of this Master Ballot. Please
indicate whether you are attaching additional pages. All additional pages with
respect to other information required in the Ballot should be marked with your
name and signed and should identify the Item of the Master Ballot to which it
relates;
2. Vote to accept or reject the Plan in Items 2 and 3 for the Old Senior
Notes held by you as the Registered Owner on behalf of each Beneficial Holder;
3. Sign and date your Master Ballot;
4. If you are completing this Master Ballot on behalf of another entity,
identify the entity and state your relationship with such entity and authority
to execute the Master Ballot on the entity's behalf, and be sure to write the
names of all joint holders even if signed by only one. If the Old Senior Notes
are held by a corporation, the Ballot should be executed in the name of the
corporation by an authorized officer. If the Old Senior Notes are held by a
partnership, the Ballot should be executed in the name of the partnership by a
general partner. If you are signing in a representative capacity, indicate your
title after your signature;
5. Provide your name and mailing address (if different from the preprinted
address on the Master Ballot, or if no preprinted address appears on the Master
Ballot); and
6. Provide the information required by Item 4 if the Beneficial Holder has
submitted or will submit any other Ballots for the Old Senior Notes held in
other accounts or other record names.
If You Are the Registered Owner AND the Beneficial Holder, To Properly
Complete the Master Ballot, You Must Follow These Instructions:
1. Make sure that the information required by Item 1 in the Ballot has been
inserted; if you do not know the principal amount of your Old Senior Notes,
please contact either your broker or your nominee;
2. Cast one vote to accept or reject the Plan by checking the proper box in
Item 2 for the Old Senior Notes held by you;
3. Sign and date the Master Ballot;
4. If you believe that you have received the wrong Ballot, please contact
the Ballot Agent immediately;
5. If you are completing this Master Ballot on behalf of another entity,
you must indicate your relationship with such entity and the capacity in which
you are signing;
6. Provide your name and mailing address if different from the preprinted
address which appears on the Master Ballot, or if no preprinted address appears
on the Master Ballot;
7. If additional space is required to respond to any item on the Master
Ballot, please use additional sheets of paper clearly marked with your name and
signed to indicate the applicable item of the Master Ballot; and
8. Return your Master Ballot using the enclosed return envelope, which is
pre-addressed to the Ballot Agent. The attached Master Ballot should be returned
in the pre-addressed postage-paid envelope provided herewith, or may be
delivered in such other manner as is reasonably calculated to cause it to reach
the Ballot Agent prior to the expiration of the Voting Deadline.
Voting Deadline and Extensions. To have your vote and/or the votes of your
Beneficial Holders count, you must complete, sign and return this Master Ballot
so that it is RECEIVED by the Ballot Agent no later than 4:30 p.m., Eastern
Daylight Time (New York City Time), on May 8, 1996. Votes transmitted by any
untimely received Master Ballot will not be counted. ILLEGIBLE OR UNSIGNED
BALLOTS OR BALLOTS RECEIVED BY FACSIMILE WILL NOT BE COUNTED OR ACCEPTED. The
Debtors reserve the right to extend the Voting Deadline in their sole
discretion. If the Voting Deadline is extended, notice thereof will be made by
public announcement.
This Master Ballot is not a letter of transmittal and may not be used for
any purpose other than to cast a vote to accept or reject the Plan. Accordingly,
holders of the Old Senior Notes should not surrender, at this time, the
certificates representing their Old Senior Notes, and neither the Debtors nor
the Ballot Agent will accept delivery of any such certificates representing Old
Senior Notes surrendered together with this Master Ballot.
No fees or commissions or other remuneration will be paid to any broker,
bank or other person for soliciting Beneficial Holder Ballots accepting the
Plan. The Debtors will, however, upon request, reimburse you for customary
mailing and handling expenses incurred by you in forwarding the Beneficial
Holder Ballots and other Solicitation Materials to your clients.
If you vote, you must vote all the Old Senior Notes that you hold or own to
accept or reject the Plan, even if the Old Senior Notes are held at different
banks or brokers. Accordingly, a Ballot (or multiple Ballots with respect to
multiple claims within a single class) that partially accepts and partially
rejects the Plan will not be counted, even if the Old Senior Notes are held at
different banks or brokers.
If any Ballot is validly executed but does not indicate a vote either to
accept or reject the Plan, the Ballot will not be counted. If any Ballot is
validly executed but indicates both an acceptance and rejection of the Plan, the
Ballot will not be counted. If multiple Ballots are received from a holder of
Old Senior Notes with respect to the same Old Senior Notes prior to the Voting
Deadline which withdraw or change a vote, the first Ballot timely received may
only be withdrawn or a vote changed with the approval of the Bankruptcy Court.
If more than one Ballot is timely submitted and the later Ballot(s) contain(s)
the words "Additional Vote" or such other language as is customarily used to
indicate an additional vote, that Ballot will not revoke an earlier vote and
will be counted as an additional vote.
PLEASE RETURN THIS MASTER BALLOT PROMPTLY!
IF YOU HAVE ANY QUESTIONS REGARDING THIS BALLOT OR THE VOTING PROCEDURES OR IF
YOU NEED ADDITIONAL COPIES OF THE SOLICITATION MATERIALS, PLEASE CONTACT
THE BALLOT AGENT:
LOGAN & COMPANY, INC.
615 WASHINGTON STREET
HOBOKEN, NEW JERSEY 07030
PHONE: (201) 798-1031
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED SOLICITATION MATERIALS
CONSTITUTES AUTHORITY FOR YOU OR ANY OTHER PERSON TO ACT AS THE AGENT OF THE
DEBTORS, OR AUTHORIZES YOU OR ANY PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE PLAN, EXCEPT FOR THE
STATEMENTS CONTAINED IN THE SOLICITATION MATERIALS ENCLOSED HEREWITH.
[PINK BALLOT]
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: ) Chapter 11
)
KALVAR MICROFILM, INC., ) Case No. 96-15 (HSB)
ANACOMP, INC., ANACOMP )
INTERNATIONAL N.V., FLORIDA )
A A C CORPORATION and ) Jointly Administered
XIDEX DEVELOPMENT COMPANY, )
)
Debtors. )
MASTER BALLOT FOR ACCEPTING OR REJECTING THE DEBTORS'
SECOND AMENDED JOINT PLAN OF REORGANIZATION
FOR 15% SENIOR SUBORDINATED NOTES DUE 2000
(THE "OLD SENIOR SUBORDINATED NOTES")
PLEASE READ AND FOLLOW THE ATTACHED INSTRUCTIONS CAREFULLY.
PLEASE COMPLETE, SIGN AND DATE THIS MASTER BALLOT AND RETURN IT IN THE ENCLOSED
PRE-ADDRESSED ENVELOPE TO LOGAN & COMPANY, INC. (THE "BALLOT AGENT") AT 615
WASHINGTON STREET, HOBOKEN, NEW JERSEY 07030. IF THIS MASTER BALLOT HAS NOT BEEN
RECEIVED BY THE BALLOT AGENT BY 4:30 P.M., EASTERN DAYLIGHT TIME (NEW YORK CITY
TIME), ON MAY 8, 1996 (THE "VOTING DEADLINE"), YOUR VOTE AND/OR THE VOTES OF THE
BENEFICIAL OWNERS FOR WHOM YOU HOLD THE OLD SENIOR SUBORDINATED NOTES AS
REGISTERED OWNER WILL NOT BE COUNTED. THEREFORE, YOU MUST ALLOW ADDITIONAL TIME
TO SEND YOUR BALLOT.
This Ballot may not be used for any purpose other than for
casting votes to accept or reject the Debtors' Second Amended Joint Plan of
Reorganization (the "Plan") under Chapter 11 of the United States Bankruptcy
Code of Anacomp, Inc., Anacomp International N.V., Kalvar Microfilm, Inc.,
Florida A A C Corporation and Xidex Development Company. Each term that is
initially capitalized herein and not defined herein shall have the meaning
ascribed to such term in the Plan.
This Master Ballot is to be used by any party which owns Old
Senior Subordinated Notes for its own account and by any broker, proxy
intermediary or other registered holder or nominee for transmitting the votes
cast by or on behalf of the owners of a beneficial interest (the "Beneficial
Holders") in the Old Senior Subordinated Notes as of March 28, 1996 (the "Ballot
Record Date"). If you are also a Beneficial Holder of any Old Senior
Subordinated Notes, please see the attached Instructions.
The Plan can be confirmed by the Bankruptcy Court and thereby
made binding on all holders of the Old Senior Subordinated Notes, if it is
accepted by the holders of two-thirds in dollar amount and more than one-half in
number of the allowed claims voted in each class of claims voting on the Plan.
In the event the requisite acceptances are not obtained, the Bankruptcy Court
may nevertheless confirm the Plan if the Bankruptcy Court finds that the Plan
accords fair and equitable treatment to the class or classes rejecting it and
otherwise satisfies the requirements of Section 1129(b) of the United States
Bankruptcy Code. TO HAVE YOUR VOTES AND/OR THE VOTES OF YOUR CUSTOMERS COUNT,
YOU MUST COMPLETE, SIGN, AND TIMELY RETURN THIS MASTER BALLOT. BALLOTS WHICH ARE
NOT SIGNED WILL NOT BE COUNTED.
Item 1: Aggregate principal amount of the Old Senior Subordinated Notes as
to which votes are cast.
The undersigned certifies that it (please check the applicable box(es)):
[ ] is the registered owner ("Registered Owner") AND the
Beneficial Holder of the following aggregate principal
amount(s) of the Old Senior Subordinated Notes as of the
Ballot Record Date in its own name or through a position held
at a securities depository;
[ ] is the Registered Owner AND NOT the Beneficial Holder of the
following aggregate principal amount(s) of the Old Senior
Subordinated Notes as of the Ballot Record Date in its own
name or through a position held at a securities depository; or
[ ] is acting under a power of attorney or proxy granted by the
Registered Owner of the following aggregate principal
amount(s) of the Old Senior Subordinated Notes.
Bond Number(s) Principal Amount
1. __________ $ __________
2. __________ $ __________
3. __________ $ __________
4. __________ $ __________
5. __________ $ __________
6. __________ $ __________
Please attach additional pages as necessary.
[ ] Additional pages are attached
[ ] Additional pages are not attached
Item 2: Vote -- Aggregate Principal Amount of the Old Senior Subordinated
Notes.
THE MEMBERS OF THE OFFICIAL UNSECURED CREDITORS' COMMITTEE HAVE REVIEWED
THE PROPOSED TERMS OF THE PLAN AND RECOMMEND THAT YOU VOTE TO ACCEPT THE PLAN
If the undersigned is the Registered Owner AND NOT the Beneficial Holder of
the aggregate principal amount of Old Senior Subordinated Notes set forth in
Item 1 above, the undersigned, as authorized and instructed by the Beneficial
Holders of such Old Senior Subordinated Notes, transmits the following votes of
such Beneficial Holders in respect of their Old Senior Subordinated Notes:
ACCEPT THE PLAN: $________________
Aggregate Principal Amount of
the Old Senior Notes
REJECT THE PLAN: $_________________
Aggregate Principal Amount of
the Old Senior Notes
If the undersigned is both the Registered Owner AND the Beneficial Holder
of the principal amount of the Old Senior Subordinated Notes set forth in Item 1
above, the undersigned votes to (please check one):
[ ] ACCEPT THE PLAN
[ ] REJECT THE PLAN
If this Ballot does not indicate either an acceptance or a rejection or
indicates both an acceptance and a rejection of the Plan, your vote will not be
counted.
Item 3: Vote -- Number of Beneficial Holders of Old Senior Subordinated
Notes.
(This section does not apply to Old Senior Subordinated Notes for which the
undersigned is both Registered Owner AND Beneficial Holder.)
The undersigned, as the Registered Owner and not the Beneficial Holder of
the Old Senior Subordinated Notes, certifies that this summary is a true and
accurate schedule of the _____ Ballots that have been cast by the following
Beneficial Holders of Old Senior Subordinated Notes, as identified by their
respective customer account numbers, which have delivered to the undersigned
_____ Ballots casting votes to accept the Plan and _____ Ballots casting votes
to reject the Plan, as set forth in further detail below (indicate the aggregate
principal amount for each respective account under the appropriate column):
Principal Amount of the Old Senior Subordinated Notes
Name and/or Account Number of
Each Beneficial Holder To Accept The Plan To Reject The Plan
1. ___________________________ $___________ $____________
2. ___________________________ $___________ $____________
3. ___________________________ $___________ $____________
4. ___________________________ $___________ $____________
5. ___________________________ $___________ $____________
Total Number of Beneficial Total Accepting: Total Rejecting:
Holders_____________ $_____________ $_____________
Please attach additional pages as necessary.
[ ] Additional pages are attached
[ ] Additional pages are not attached
Item 4: Certification as to the Old Senior Subordinated Notes.
By returning this Ballot, the undersigned certifies that the Registered
Owner and/or the Beneficial Holder has not submitted additional Ballots for the
Old Senior Subordinated Notes identified in Item 1, except as specified in the
table immediately below, to the undersigned. If applicable to you, please
provide the information required by this Item 4 in the following table (please
use additional sheets of paper if necessary):
Name of Registered Account Principal
Holder or Nominee* Number** Amount
________________________ __________ $ __________
________________________ __________ $ __________
________________________ __________ $ __________
________________________ __________ $ __________
________________________ __________ $ __________
* Insert your name if the Old Senior Subordinated Notes are held by you in
record name, or, if held in street name, insert name of broker or bank (or agent
thereof) through which you own the Old Senior Subordinated Notes.
** Please indicate the account number of the broker or bank where the
account is held.
Item 5: The undersigned understands that if it signs this Ballot without
indicating the principal amount of the Old Senior Subordinated Notes rejecting
or accepting the Plan in Item 2 above, the entire aggregate amount of Old Senior
Subordinated Notes set forth on Item 1 above will not be counted.
Item 6: Certifications.
(a) By signing this Master Ballot, the undersigned certifies that each
Beneficial Holder of an Old Senior Subordinated Note whose vote is being
transmitted by this Master Ballot has been provided with a copy of the
Disclosure Statement (as defined in the instructions hereto), a Ballot and all
related solicitation materials, including the exhibits to the Disclosure
Statement. The undersigned further certifies that if it is the Registered Owner
and not the Beneficial Holder of the Old Senior Subordinated Notes, a record of
the voting instructions received from each Beneficial Holder will remain on file
with the undersigned.
(b) By signing this Master Ballot, the undersigned certifies that, as
indicated in Item 1, it (a) is the Registered Owner and the Beneficial Holder of
the aggregate principal amount of the Old Senior Subordinated Notes set forth in
Item 1, (b) is the Registered Owner and not the Beneficial Holder of the
aggregate principal amount of the Old Senior Subordinated Notes set forth in
Item 1, or (c) is acting under a power of attorney or proxy granted by the
Registered Owner of the aggregate principal amount of the Old Senior
Subordinated Notes set forth in Item 1, and, accordingly, has full power and
authority to vote to accept or reject the Plan. The undersigned also
acknowledges that this solicitation is governed by all the terms and conditions
of the Plan and the description thereof in the Disclosure Statement.
(c) By signing this Master Ballot, the undersigned certifies that it is
understood that if this Ballot or the Ballots returned by Beneficial Holders are
returned by facsimile, are unsigned, are illegible, indicate both an acceptance
and rejection of the Plan, or fails to indicate a vote either to accept or
reject the Plan, such Ballots will not be counted.
(d) By signing this Master Ballot, the undersigned certifies that it is
understood that if the undersigned signs this Ballot, and votes to reject or
accept the Plan, without indicating the principal amount of the Old Senior
Subordinated Notes rejecting or accepting the Plan, this Ballot will not be
counted.
(e) The undersigned certifies that it has transcribed the information, if
any, provided in Item 3 of each Ballot received from each Beneficial Holder of
Old Senior Subordinated Notes.
Name of (a) Registered Owner, (b)
Beneficial Holder, (c) Power of
Attorney or Proxy Holder:
________________________________________
(Print or Type)
Social Security or Federal
Tax ID No. (Optional) _____________________________________
Depository Participant Number _____________________________
Signature: ________________________________________________
Print Name of Signatory: __________________________________
By: _______________________________________________________
(If Applicable)
Title: ____________________________________________________
(If Applicable)
Address: __________________________________________________
___________________________________________________________
City, State and Zip Code
Telephone Number: (____) _________________________________
Date Completed: ___________________________________________
SEE ATTACHED VOTING INSTRUCTIONS
INSTRUCTIONS FOR COMPLETING THE MASTER BALLOT
Anacomp, Inc., Anacomp International N.V., Kalvar Microfilm, Inc., Florida
A A C Corporation and Xidex Development Company (the "Debtors") are soliciting
(a) your votes, if you are both the Registered Owner and Beneficial Holder of
the Old Senior Subordinated Notes, or (b) the votes of your Beneficial Holders
of the Old Senior Subordinated Notes, if you are either the Registered Owner or
acting under a power of attorney or proxy granted by the Registered Owner and
not the Beneficial Holder of the Old Senior Subordinated Notes with respect to
the Debtors' proposed Second Amended Joint Plan of Reorganization under Chapter
11 of the United States Bankruptcy Code dated March 28, 1996 (the "Plan"), a
copy of which is attached to the accompanying disclosure statement dated March
28, 1996 (the "Disclosure Statement"). Please review the Disclosure Statement
and exhibits thereto carefully before you vote.
This Master Ballot is to be used by (i) any broker, proxy intermediary or
other nominee which is a Registered Owner of Old Senior Subordinated Notes on
the Ballot Record Date or is acting by authority of such Registered Owner and is
recording, summarizing and transmitting votes cast to accept or reject the Plan
by or on behalf of the Beneficial Holders of the Old Senior Subordinated Notes
for whom you are the Registered Owner/nominee, or (ii) any party which is both
the Registered Owner and Beneficial Holder of the Old Senior Subordinated Notes
on the Ballot Record Date.
If you are the Registered Owner and NOT THE Beneficial Holder of the Old
Senior Subordinated Notes, you should deliver the Beneficial Holder Ballot and
other documents relating to the Plan, including the Disclosure Statement and the
exhibits thereto (collectively, the "Solicitation Materials"), to each
Beneficial Holder of the Old Senior Subordinated Notes and take any action
required to enable each such Beneficial Holder to vote the Old Senior
Subordinated Notes owned by such Beneficial Holder. With regard to any
Beneficial Holder Ballots returned to you, you must (a) retain such Beneficial
Holder Ballots in your files for one year and transfer the requested information
from each such Beneficial Holder Ballot onto the attached Master Ballot, (b)
execute the Master Ballot, and (c) arrange for delivery of such Master Ballot to
the Ballot Agent. Please keep any records of the voting instructions received
from Beneficial Holders, including all Beneficial Holder Ballots.
If you are both the Registered Owner and Beneficial Holder of the Old
Senior Subordinated Notes, you must complete, execute and return this Ballot
directly to the Ballot Agent to vote such Old Senior Subordinated Notes.
Multiple Master Ballots may be completed and delivered to the Ballot Agent.
Votes reflected by these multiple Master Ballots will be counted except to the
extent that they are duplicative of other Master Ballots. If two or more Master
Ballots timely received by the Ballot Agent are inconsistent, to the extent the
later Master Ballot seeks to change or withdraw a vote cast in a prior Master
Ballot, such votes cast may only be changed or withdrawn with approval of the
Bankruptcy Court. If more than one Master Ballot is timely submitted and the
later Master Ballot(s) contain(s) the words "Additional Vote" or such other
language as is customarily used to indicate an additional vote, that Master
Ballot will not revoke an earlier vote and will be counted as an additional
vote.
If You Are the Registered Owner AND NOT the Beneficial Holder, To Properly
Complete The Master Ballot, You Must Follow These Instructions:
1. Provide appropriate information for each of the items on the Master
Ballot. Please note that Item 3 requests information which is set forth in the
Ballots received by you from each individual Beneficial Holder for whom you hold
Old Senior Subordinated Notes in your name. To identify such Beneficial Holders
without disclosing their names, please use the customer account number assigned
by you to each such Beneficial Holder or, if no such customer account number
exists, please use the numbers you have assigned internally to identify such
Beneficial Holder (making sure to retain a separate list of each Beneficial
Holder and his or her assigned number) ). If additional information is provided
in Item 3 of the Ballots received by you from such Beneficial Holders, please
provide such information at Item 4 of this Master Ballot. Please indicate
whether you are attaching additional pages. All additional pages with respect to
other information required in the Ballot should be marked with your name and
signed and should identify the Item of the Master Ballot to which it relates;
2. Vote to accept or reject the Plan in Items 2 and 3 for the Old Senior
Subordinated Notes held by you as the Registered Owner on behalf of each
Beneficial Holder;
3. Sign and date your Master Ballot;
4. If you are completing this Master Ballot on behalf of another entity,
identify the entity and state your relationship with such entity and authority
to execute the Master Ballot on the entity's behalf, and be sure to write the
name of all joint holders even if signed by only one. If the Old Senior
Subordinated Notes are held by a corporation, the Ballot should be executed in
the name of the corporation by an authorized officer. If the Old Senior
Subordinated Notes are held by a partnership, the Ballot should be executed in
the name of the partnership by a general partner. If you are signing in a
representative capacity, indicate your title after your signature;
5. Provide your name and mailing address (if different from the preprinted
address on the Master Ballot, or if no preprinted address appears on the Master
Ballot); and
6. Provide the information required by Item 4 if the Beneficial Holder has
submitted or will submit any other Ballots for the Old Senior Subordinated Notes
held in other accounts or other record names.
If You Are the Registered Owner AND the Beneficial Holder, To Properly
Complete the Master Ballot, You Must Follow These Instructions:
1. Make sure that the information required by Item 1 in the Ballot has been
inserted; if you do not know the principal amount of your Old Senior
Subordinated Notes, please contact either State Street Bank and Trust Company,
your broker or your nominee;
2. Cast one vote to accept or reject the Plan by checking the proper box in
Item 2 for the Old Senior Subordinated Notes held by you;
3. Sign and date the Master Ballot;
4. If you believe that you have received the wrong Ballot, please contact
the Ballot Agent immediately;
5. If you are completing this Master Ballot on behalf of another entity,
you must indicate your relationship with such entity and the capacity in which
you are signing;
6. Provide your name and mailing address if different from the preprinted
address which appears on the Master Ballot, or if no preprinted address appears
on the Master Ballot;
7. If additional space is required to respond to any item on the Master
Ballot, please use additional sheets of paper clearly marked with your name and
signed to indicate the applicable item of the Master Ballot; and
8. Return your Master Ballot using the enclosed return envelope, which is
pre-addressed to the Ballot Agent. The attached Master Ballot should be returned
in the pre-addressed postage-paid envelope provided herewith, or may be
delivered in such other manner as is reasonably calculated to cause it to reach
the Ballot Agent prior to the expiration of the Voting Deadline.
Voting Deadline and Extensions. To have your vote and/or the votes of your
Beneficial Holders count, you must complete, sign and return this Master Ballot
so that it is RECEIVED by the Ballot Agent no later than 4:30 p.m., Eastern
Daylight Time (New York City Time), on May 8, 1996. Votes transmitted by any
untimely received Master Ballot will not be counted. ILLEGIBLE OR UNSIGNED
BALLOTS OR BALLOTS RECEIVED BY FACSIMILE WILL NOT BE COUNTED OR ACCEPTED. The
Debtors reserve the right to extend the Voting Deadline in their sole
discretion. If the Voting Deadline is extended, notice thereof will be made by
public announcement.
This Master Ballot is not a letter of transmittal and may not be used for
any purpose other than to cast a vote to accept or reject the Plan. Accordingly,
holders of the Old Senior Subordinated Notes should not surrender, at this time,
the certificates representing their Old Senior Subordinated Notes, and neither
the Debtors nor the Ballot Agent will not accept delivery of any such
certificates representing Old Senior Subordinated Notes surrendered together
with this Master Ballot.
No fees or commissions or other remuneration will be paid to any broker,
bank or other person for soliciting Beneficial Holder Ballots accepting the
Plan. The Debtors will, however, upon request, reimburse you for customary
mailing and handling expenses incurred by you in forwarding the Beneficial
Holder Ballots and other Solicitation Materials to your clients.
If you vote, you must vote all the Old Senior Subordinated Notes that you
hold or own to accept or reject the Plan, even if the Old Senior Subordinated
Notes are held at different banks or brokers. Accordingly, a Ballot (or multiple
Ballots with respect to multiple claims within a single class) that partially
accepts and partially rejects the Plan will not be counted, even if the Old
Senior Subordinated Notes are held at different banks or brokers.
If any Ballot is validly executed but does not indicate a vote either to
accept or reject the Plan, the Ballot will not be counted. If any Ballot is
validly executed but indicates both an acceptance and rejection of the Plan, the
Ballot will not be counted. If multiple Ballots are received from a holder of
Old Senior Subordinated Notes with respect to the same Old Senior Subordinated
Notes prior to the Voting Deadline which withdraw or change a vote, the first
Ballot timely received may only be withdrawn or a vote changed with the approval
of the Bankruptcy Court. If more than one Ballot is timely submitted and the
later Ballot(s) contain(s) the words "Additional Vote" or such other language as
is customarily used to indicate an additional vote, that Ballot will not revoke
an earlier vote and will be counted as an additional vote.
PLEASE RETURN THIS MASTER BALLOT PROMPTLY!
IF YOU HAVE ANY QUESTIONS REGARDING THIS BALLOT OR THE VOTING PROCEDURES OR IF
YOU NEED ADDITIONAL COPIES OF THE SOLICITATION MATERIALS, PLEASE CONTACT
THE BALLOT AGENT:
LOGAN & COMPANY, INC.
615 WASHINGTON STREET
HOBOKEN, NEW JERSEY 07030
PHONE: (201) 798-1031
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED SOLICITATION MATERIALS
CONSTITUTES AUTHORITY FOR YOU OR ANY OTHER PERSON TO ACT AS THE AGENT OF THE
DEBTORS, OR AUTHORIZES YOU OR ANY PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE PLAN, EXCEPT FOR THE
STATEMENTS CONTAINED IN THE SOLICITATION MATERIALS ENCLOSED HEREWITH.
[BLUE BALLOT]
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: ) Chapter 11
)
KALVAR MICROFILM, INC., ) Case No. 96-15 (HSB)
ANACOMP, INC., ANACOMP )
INTERNATIONAL N.V., FLORIDA )
A A C CORPORATION and ) Jointly Administered
XIDEX DEVELOPMENT COMPANY, )
)
Debtors. )
BENEFICIAL HOLDER BALLOT FOR ACCEPTING OR REJECTING
THE DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION FOR
12.25% SERIES B SENIOR NOTES DUE 1997 (THE "OLD SENIOR NOTES")
PLEASE READ AND FOLLOW THE ATTACHED VOTING INSTRUCTIONS CAREFULLY BEFORE
COMPLETING THIS BALLOT. PLEASE COMPLETE, SIGN AND DATE THIS BALLOT AND PROMPTLY
RETURN IT IN THE ENCLOSED PRE-ADDRESSED ENVELOPE TO YOUR BROKER OR BANK (OR
AGENT THEREOF) WHO IS COMPILING A MASTER BALLOT THAT WILL REFLECT THIS BALLOT.
THIS BALLOT MUST BE RETURNED TO YOUR BROKER OR BANK (OR AGENT THEREOF) EARLY
ENOUGH TO PERMIT YOUR BALLOT TO BE PROCESSED BY YOUR BROKER OR BANK (OR AGENT
THEREOF) AND THEN FORWARDED TO AND RECEIVED BY LOGAN & COMPANY, INC. (THE
"BALLOT AGENT") BY 4:30 P.M., EASTERN DAYLIGHT TIME (NEW YORK CITY TIME), ON MAY
8, 1996 (THE "VOTING DEADLINE"), OR YOUR VOTE WILL NOT BE COUNTED. THEREFORE,
YOU MUST ALLOW ADDITIONAL TIME TO SEND YOUR BALLOT.
This Ballot may not be used for any purpose other than for casting a vote
to accept or reject the Debtors' Second Amended Joint Plan of Reorganization
(the "Plan") under Chapter 11 of the United States Bankruptcy Code of Anacomp,
Inc., Anacomp International N.V., Kalvar Microfilm, Inc., Florida A A C
Corporation, and Xidex Development Company (the "Debtors"). Each initially
capitalized term used herein and not defined shall have the meaning ascribed to
such term in the Plan.
The Plan can be confirmed by the Bankruptcy Court and thereby made binding
on you if it is accepted by the holders of two-thirds in dollar amount and more
than one-half in number of the allowed claims voted in each class of claims
voting on the Plan. In the event the requisite acceptances are not obtained, the
Bankruptcy Court may nevertheless confirm the Plan if the Bankruptcy Court finds
the Plan accords fair and equitable treatment to the class or classes rejecting
it and otherwise satisfies the requirements of Section 1129(b) of the United
States Bankruptcy Code. TO HAVE YOUR VOTE COUNT YOU MUST COMPLETE, SIGN, AND
TIMELY RETURN THIS BALLOT. BALLOTS WHICH ARE NOT SIGNED WILL NOT BE COUNTED.
Holders of more than one series of bonds must complete a separate Ballot
for each such series.
PLEASE SUPPLY THE APPROPRIATE INFORMATION AND CHECK THE APPROPRIATE BOX TO
INDICATE YOUR ACCEPTANCE OR REJECTION OF THE PLAN.
Item 1. Principal amount of the Old Senior Notes for which votes are cast.
The undersigned is the owner of a beneficial interest (the "Beneficial
Holder") of the following Old Senior Notes as of March 28, 1996 (the "Ballot
Record Date").
Bond Number(s) Principal Amount
1. __________ $ __________
2. __________ $ __________
3. __________ $ __________
4. __________ $ __________
5. __________ $ __________
6. __________ $ __________
Please attach additional pages as necessary.
[ ] Additional pages are attached
[ ] Additional pages are not attached
Item 2. Vote.
The Beneficial Holder of the principal amount of the Old Senior Notes set
forth in Item 1 votes to (please check one):
[ ] ACCEPT THE PLAN
[ ] REJECT THE PLAN
If this Ballot does not indicate either an acceptance or a rejection or
indicates both an acceptance and rejection of the Plan, your vote will not be
counted.
Item 3. Certification as to the Old Senior Notes.
By signing and returning this Ballot, the undersigned certifies that,
except as specified below, the undersigned has not submitted any additional
Ballots with respect to the Old Senior Notes identified in Item 1, except as
specified in the table immediately below. If applicable to you, please provide
the information required by this Item 3 in the following table (please use
additional sheets of paper if necessary):
Name of Registered Holder
or Nominee Account Number** Principal Amount
___________________________ ___________ ____________
___________________________ ___________ ____________
___________________________ ___________ ____________
___________________________ ___________ ____________
___________________________ ___________ ____________
* Insert your name if the Old Senior Notes are held by you in record name,
or, if held in street name, insert name of broker or bank (or agent thereof)
through which you own the Old Senior Notes.
** Please indicate the account number of the broker or bank where the
account is held.
Item 4. Other Certifications.
By signing this Ballot, the undersigned certifies:
(a) that the Beneficial Holder of the Old Senior Notes set forth in Item 1
above received a Ballot with a copy of the Plan and the Disclosure Statement
relating to the Plan attached;
(b) that it is understood that if this Ballot is returned by the Beneficial
Holder by facsimile, is unsigned, is illegible, indicates both an acceptance and
rejection of the Plan, or fails to indicate a vote either to accept or reject
the Plan, the Ballot will not be counted;
(c) that it is understood that if the undersigned signs this Ballot, and
votes to reject or accept the Plan, without indicating the principal amount of
the Old Senior Notes rejecting or accepting the Plan, this Ballot will not be
counted; and
(d) that, if the undersigned is the Beneficial Holder of the Old Senior
Notes set forth in Item 1 voted hereby, the undersigned has full power and
authority to cast this Ballot to vote to accept or reject the Plan as set forth
in Item 2 above. The undersigned also acknowledges that this solicitation is
governed by all the terms and conditions of the Plan and the description thereof
in the Disclosure Statement.
________________________________________
(Print or Type)
Signature: ________________________________________________
Print Name of Signatory: __________________________________
Title: ____________________________________________________
(If Applicable)
Address: __________________________________________________
___________________________________________________________
City, State and Zip Code
Relationship of Signatory to
Holder or Owner: __________________________________________
Telephone Number: (____) _________________________________
Social Security or Federal
Tax ID No. (Optional) _____________________________________
Date Completed: ___________________________________________
SEE ATTACHED VOTING INSTRUCTIONS
VOTING INSTRUCTIONS
1. Anacomp, Inc., Anacomp International N.V., Kalvar Microfilm, Inc.,
Florida A A C Corporation and Xidex Development Company (the "Debtors") are
soliciting your vote with respect to the Debtors' proposed Second Amended Joint
Plan of Reorganization under Chapter 11 of the United States Bankruptcy Code
dated March 28, 1996 (the "Plan"), a copy of which is attached to the
accompanying disclosure statement dated March 28, 1996 (the "Disclosure
Statement"). Please review the Disclosure Statement and exhibits thereto
carefully before you vote.
2. To properly complete the Ballot, you must follow the procedures
described below:
(a) make sure that the information required by Item 1 in the Ballot has
been inserted; if you do not know the principal amount of the Old Senior Notes
held by you, please contact your bank/broker or your nominee;
(b) cast one vote to accept or reject the Plan by checking the proper box
in Item 2 for the Old Senior Notes held by you;
(c) provide the information required by Item 3 if the Beneficial Holder has
submitted any other Ballots for Old Senior Notes held in other accounts or other
record names;
(d) sign and date your Ballot. Names of all joint holders should be written
even if signed by only one. If the claim is held by a corporation, the Ballot
should be executed in the name of the corporation by an authorized officer. If
the claim is held by a partnership, the Ballot should be executed in the name of
the partnership by a general partner. If you are signing in a representative
capacity, indicate your title after your signature;
(e) if you believe that you have received the wrong Ballot, please contact
either the Ballot Agent, your bank/broker or your nominee immediately;
(f) if you are completing this Ballot on behalf of another entity, you must
indicate your relationship with such entity and the capacity in which you are
signing;
(g) provide your name and mailing address if different from the printed
address which appears on the Ballot, or if no preprinted address appears on the
Ballot;
(h) if additional space is required to respond to any item on the Ballot,
please use additional sheets of paper clearly marked with the name of the
signatory and executed, and indicate the applicable item of the Ballot on each
additional sheet; and
(i) return your Ballot using the enclosed return envelope which is
pre-addressed to a broker, bank, nominee or proxy intermediary. You must return
your Ballot early enough for your vote to be processed by your broker, bank,
nominee or proxy intermediary and then forwarded by your broker, bank, nominee
or proxy intermediary to the Ballot Agent by the Voting Deadline. Therefore,
please allow additional time.
3. If you vote, you must vote all the Old Senior Notes that you hold or own
to accept or reject the Plan, even if the Old Senior Notes are held at different
banks or brokers. Accordingly, a Ballot (or multiple Ballots with respect to
multiple claims within a single class) that partially accepts and partially
rejects the Plan will not be counted, even if the Old Senior Notes are held at
different banks or brokers.
4. If any Ballot is validly executed but does not indicate a vote either to
accept or reject the Plan, the Ballot will not be counted. If any Ballot is
validly executed but indicates both an acceptance and rejection of the Plan, the
Ballot will not be counted. If multiple Ballots are received from a holder of
Old Senior Notes with respect to the same Old Senior Notes prior to the Voting
Deadline which withdraw or change a vote, the first Ballot timely received may
only be withdrawn or a vote changed with the approval of the Bankruptcy Court.
If more than one Ballot is timely submitted and the later Ballot(s) contain(s)
the words "Additional Vote" or such other language as is customarily used to
indicate an additional vote, that Ballot will not revoke an earlier vote and
will be counted as an additional vote.
5. The Ballot is not a letter of transmittal and may not be used for any
purpose other than to vote to accept or reject the Plan. Accordingly, at this
time, holders of Old Senior Notes should not surrender certificates representing
their Old Senior Notes, and neither the Debtors nor the Ballot Agent will accept
delivery of such certificates surrendered together with a Ballot.
6. Please be sure to sign and date your Ballot. If you are completing the
Ballot on behalf of another entity, indicate your relationship with such entity
and the capacity in which you are signing. Additionally, please provide your
name and mailing address if different from that set forth on the attached
mailing label or if no such mailing label is attached to the Ballot.
7. To have your vote count the Ballot must be completed, signed and
returned to your broker or bank (or agent thereof) in sufficient time to allow
it to be forwarded to, and RECEIVED by, the Ballot Agent by no later than 4:30
p.m., Eastern Daylight Time (New York City Time), on May 8, 1996 or your vote
will not be counted. ILLEGIBLE OR UNSIGNED BALLOTS OR BALLOTS RECEIVED BY
FACSIMILE WILL NOT BE COUNTED OR ACCEPTED. If you believe you have received the
wrong Ballot, please contact the Ballot Agent or your broker or bank
immediately. The Debtors reserve the right to extend the Voting Deadline in
their sole discretion. If the Voting Deadline is extended, notice thereof will
be made by public announcement.
PLEASE MAIL YOUR BALLOT PROMPTLY!
IF YOU HAVE ANY QUESTIONS REGARDING THIS BALLOT
OR THE VOTING PROCEDURES,
PLEASE CONTACT THE BALLOT AGENT:
LOGAN & COMPANY, INC.
615 WASHINGTON STREET
HOBOKEN, NEW JERSEY 07030
PHONE: (201) 798-1031
OR
MORROW & CO., INC.
909 THIRD AVENUE
NEW YORK, NEW YORK 10022-4799
PHONE: (212) 754-8000
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED SOLICITATION MATERIALS
CONSTITUTES AUTHORITY FOR YOU OR ANY OTHER PERSON TO ACT AS THE AGENT OF THE
DEBTORS, OR AUTHORIZES YOU OR ANY PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE PLAN, EXCEPT FOR THE
STATEMENTS CONTAINED IN THE SOLICITATION MATERIALS ENCLOSED HEREWITH.
[PINK BALLOT]
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: ) Chapter 11
)
KALVAR MICROFILM, INC., ) Case No. 96-15 (HSB)
ANACOMP, INC., ANACOMP )
INTERNATIONAL N.V., FLORIDA )
A A C CORPORATION and ) Jointly Administered
XIDEX DEVELOPMENT COMPANY, )
)
Debtors. )
BENEFICIAL HOLDER BALLOT FOR ACCEPTING OR REJECTING THE DEBTORS'
SECOND AMENDED JOINT PLAN OF REORGANIZATION FOR 15% SENIOR
SUBORDINATED NOTES DUE 2000 (THE "OLD SENIOR SUBORDINATED NOTES")
PLEASE READ AND FOLLOW THE ATTACHED VOTING INSTRUCTIONS CAREFULLY BEFORE
COMPLETING THIS BALLOT. PLEASE COMPLETE, SIGN AND DATE THIS BALLOT AND PROMPTLY
RETURN IT IN THE ENCLOSED PRE-ADDRESSED ENVELOPE TO YOUR BROKER OR BANK (OR
AGENT THEREOF) WHO IS COMPILING A MASTER BALLOT THAT WILL REFLECT THIS BALLOT.
THIS BALLOT MUST BE RETURNED TO YOUR BROKER OR BANK (OR AGENT THEREOF) EARLY
ENOUGH TO PERMIT YOUR BALLOT TO BE PROCESSED BY YOUR BROKER OR BANK (OR AGENT
THEREOF) AND THEN FORWARDED TO AND RECEIVED BY LOGAN & COMPANY, INC. (THE
"BALLOT AGENT") BY 4:30 P.M., EASTERN DAYLIGHT TIME (NEW YORK CITY TIME), ON MAY
8, 1996 (THE "VOTING DEADLINE"), OR YOUR VOTE WILL NOT BE COUNTED. THEREFORE,
YOU MUST ALLOW ADDITIONAL TIME TO SEND YOUR BALLOT.
This Ballot may not be used for any purpose other than for casting a vote
to accept or reject the Debtors' Second Amended Joint Plan of Reorganization
(the "Plan") under Chapter 11 of the United States Bankruptcy Code of Anacomp,
Inc., Anacomp International N.V., Kalvar Microfilm, Inc., Florida A A C
Corporation, and Xidex Development Company (the "Debtors"). Each initially
capitalized term used herein and not defined shall have the meaning ascribed to
such term in the Plan.
The Plan can be confirmed by the Bankruptcy Court and thereby made binding
on you if it is accepted by the holders of two-thirds in dollar amount and more
than one-half in number of the allowed claims voted in each class of claims
voting on the Plan. In the event the requisite acceptances are not obtained, the
Bankruptcy Court may nevertheless confirm the Plan if the Bankruptcy Court finds
the Plan accords fair and equitable treatment to the class or classes rejecting
it and otherwise satisfies the requirements of Section 1129(b) of the United
States Bankruptcy Code. TO HAVE YOUR VOTE COUNT YOU MUST COMPLETE, SIGN, AND
TIMELY RETURN THIS BALLOT. BALLOTS WHICH ARE NOT SIGNED WILL NOT BE COUNTED.
Holders of more than one series of bonds must complete a separate Ballot
for each such series.
PLEASE SUPPLY THE APPROPRIATE INFORMATION AND CHECK THE APPROPRIATE BOX TO
INDICATE YOUR ACCEPTANCE OR REJECTION OF THE PLAN.
Item 1. Principal amount of the Old Senior Subordinated Notes for which
votes are cast.
The undersigned is the owner of a beneficial interest (the "Beneficial
Holder") of the following Old Senior Subordinated Notes as of March 28, 1996
(the "Ballot Record Date").
Bond Number(s) Principal Amount
1. __________ $ __________
2. __________ $ __________
3. __________ $ __________
4. __________ $ __________
5. __________ $ __________
6. __________ $ __________
Please attach additional pages as necessary.
[ ] Additional pages are attached
[ ] Additional pages are not attached
Item 2. Vote.
THE MEMBERS OF THE OFFICIAL UNSECURED CREDITORS' COMMITTEE HAVE REVIEWED
THE PROPOSED TERMS OF THE PLAN AND RECOMMEND THAT YOU VOTE TO ACCEPT THE PLAN.
The Beneficial Holder of the principal amount of the Old Senior
Subordinated Notes set forth in Item 1 votes to (please check one):
[ ] ACCEPT THE PLAN
[ ] REJECT THE PLAN
If this Ballot does not indicate either an acceptance or a rejection or
indicates both an acceptance and rejection of the Plan, your vote will not be
counted.
Item 3. Certification as to the Old Senior Subordinated Notes.
By signing and returning this Ballot, the undersigned certifies that,
except as specified below, the undersigned has not submitted any additional
Ballots with respect to the Old Senior Subordinated Notes identified in Item 1,
except as specified in the table immediately below. If applicable to you, please
provide the information required by this Item 3 in the following table (please
use additional sheets of paper if necessary):
Name of Registered Holder
or Nominee Account Number** Principal Amount
___________________________ ___________ ____________
___________________________ ___________ ____________
___________________________ ___________ ____________
___________________________ ___________ ____________
___________________________ ___________ ____________
* Insert your name if the Old Senior Subordinated Notes are held by you in
record name, or, if held in street name, insert name of broker or bank (or agent
thereof) through which you own the Old Senior Subordinated Notes.
** Please indicate the account number of the broker or bank where the
account is held.
Item 4. Other Certifications.
By signing this Ballot, the undersigned certifies:
(a) that the Beneficial Holder of the Old Senior Subordinated Notes set
forth in Item 1 above received a Ballot with a copy of the Plan and the
Disclosure Statement relating to the Plan attached;
(b) that it is understood that if this Ballot is returned by the Beneficial
Holder by facsimile, is unsigned, is illegible, indicates both an acceptance and
rejection of the Plan, or fails to indicate a vote either to accept or reject
the Plan, the Ballot will not be counted;
(c) that it is understood that if the undersigned signs this Ballot, and
votes to reject or accept the Plan, without indicating the principal amount of
the Old Senior Subordinated Notes rejecting or accepting the Plan, this Ballot
will not be counted; and
(d) that, if the undersigned is the Beneficial Holder of the Old Senior
Subordinated Notes set forth in Item 1 voted hereby, the undersigned has full
power and authority to cast this Ballot to vote to accept or reject the Plan as
set forth in Item 2 above. The undersigned also acknowledges that this
solicitation is governed by all the terms and conditions of the Plan and the
description thereof in the Disclosure Statement.
________________________________________
(Print or Type)
Signature: ________________________________________________
Print Name of Signatory: __________________________________
Title: ____________________________________________________
(If Applicable)
Address: __________________________________________________
___________________________________________________________
City, State and Zip Code
Relationship of Signatory to
Holder or Owner: __________________________________________
Telephone Number: (____) _________________________________
Social Security or Federal
Tax ID No. (Optional) _____________________________________
Date Completed: ___________________________________________
SEE ATTACHED VOTING INSTRUCTIONS
VOTING INSTRUCTIONS
1. Anacomp, Inc., Anacomp International N.V., Kalvar Microfilm, Inc.,
Florida A A C Corporation and Xidex Development Company (the "Debtors") are
soliciting your vote with respect to the Debtors' proposed Second Amended Joint
Plan of Reorganization under Chapter 11 of the United States Bankruptcy Code
dated March 28, 1996 (the "Plan"), a copy of which is attached to the
accompanying disclosure statement dated March 28, 1996 (the "Disclosure
Statement"). Please review the Disclosure Statement and exhibits thereto
carefully before you vote.
2. To properly complete the Ballot, you must follow the procedures
described below:
(a) make sure that the information required by Item 1 in the Ballot has
been inserted; if you do not know the principal amount of the Old Senior
Subordinated Notes held by you, please contact either State Street Bank and
Trust Company, your bank/broker or your nominee;
(b) cast one vote to accept or reject the Plan by checking the proper box
in Item 2 for the Old Senior Subordinated Notes held by you;
(c) provide the information required by Item 3 if the Beneficial Holder has
submitted any other Ballots for Old Senior Subordinated Notes held in other
accounts or other record names;
(d) sign and date your Ballot. Names of all joint holders should be written
even if signed by only one. If the claim is held by a corporation, the Ballot
should be executed in the name of the corporation by an authorized officer. If
the claim is held by a partnership, the Ballot should be executed in the name of
the partnership by a general partner. If you are signing in a representative
capacity, indicate your title after your signature;
(e) if you believe that you have received the wrong Ballot, please contact
either the Ballot Agent, your bank/broker or your nominee immediately;
(f) if you are completing this Ballot on behalf of another entity, kindly
indicate your relationship with such entity and the capacity in which you are
signing;
(g) provide your name and mailing address if different from the printed
address which appears on the Ballot, or if no preprinted address appears on the
Ballot;
(h) if additional space is required to respond to any item on the Ballot,
please use additional sheets of paper clearly marked with the name of the
signatory and executed, and indicate the applicable item of the Ballot; and
(i) return your Ballot using the enclosed return envelope which is
pre-addressed to a broker, bank, nominee or proxy intermediary. You must return
your Ballot early enough for your vote to be processed by your broker, bank,
nominee or proxy intermediary and then forwarded by your broker, bank, nominee
or proxy intermediary to the Ballot Agent by the Voting Deadline. Therefore,
please allow additional time.
3. If you vote, you must vote all the Old Senior Subordinated Notes that
you hold or own to accept or reject the Plan, even if the Old Senior
Subordinated Notes are held at different banks or brokers. Accordingly, a Ballot
(or multiple Ballots with respect to multiple claims within a single class) that
partially accepts and partially rejects the Plan will not be counted, even if
the Old Senior Subordinated Notes are held at different banks or brokers.
4. If any Ballot is validly executed but does not indicate a vote either to
accept or reject the Plan, the Ballot will not be counted. If any Ballot is
validly executed but indicates both an acceptance and rejection of the Plan, the
Ballot will not be counted. If multiple Ballots are received from a holder of
Old Senior Subordinated Notes with respect to the same Old Senior Subordinated
Notes prior to the Voting Deadline which withdraw or change a vote, the first
Ballot timely received may only be withdrawn or a vote changed with the approval
of the Bankruptcy Court. If more than one Ballot is timely submitted and the
later Ballot(s) contain(s) the words "Additional Vote" or such other language as
is customarily used to indicate an additional vote, that Ballot will not revoke
an earlier vote and will be counted as an additional vote.
5. The Ballot is not a letter of transmittal and may not be used for any
purpose other than to vote to accept or reject the Plan. Accordingly, at this
time, holders of Old Senior Subordinated Notes should not surrender certificates
representing their Old Senior Subordinated Notes, and neither the Debtors nor
the Ballot Agent will accept delivery of such certificates surrendered together
with a Ballot.
6. Please be sure to sign and date your Ballot. If you are completing the
Ballot on behalf of another entity, indicate your relationship with such entity
and the capacity in which you are signing. Additionally, please provide your
name and mailing address if different from that set forth on the attached
mailing label or if no such mailing label is attached to the Ballot.
7. To have your vote count the Ballot must be completed, signed and
returned to your broker or bank (or agent thereof) in sufficient time to allow
it to be forwarded to, and RECEIVED by, the Ballot Agent by no later than 4:30
p.m., Eastern Daylight Time (New York City Time), on May 8, 1996 or your vote
will not be counted. ILLEGIBLE OR UNSIGNED BALLOTS OR BALLOTS RECEIVED BY
FACSIMILE WILL NOT BE COUNTED OR ACCEPTED. If you believe you have received the
wrong Ballot, please contact the Ballot Agent or your broker or bank
immediately. The Debtors reserve the right to extend the Voting Deadline in
their sole discretion. If the Voting Deadline is extended, notice thereof will
be made by public announcement.
PLEASE MAIL YOUR BALLOT PROMPTLY!
IF YOU HAVE ANY QUESTIONS REGARDING THIS BALLOT
OR THE VOTING PROCEDURES,
PLEASE CONTACT THE BALLOT AGENT:
LOGAN & COMPANY, INC.
615 WASHINGTON STREET
HOBOKEN, NEW JERSEY 07030
PHONE: (201) 798-1031
OR
MORROW & CO., INC.
909 THIRD AVENUE
NEW YORK, NEW YORK 10022-4799
PHONE: (212) 754-8000
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED SOLICITATION MATERIALS CONSTITUTES
AUTHORITY FOR YOU OR ANY OTHER PERSON TO ACT AS THE AGENT OF THE DEBTORS, OR
AUTHORIZES YOU OR ANY PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON
BEHALF OF ANY OF THEM WITH RESPECT TO THE PLAN, EXCEPT FOR THE STATEMENTS
CONTAINED IN THE SOLICITATION MATERIALS ENCLOSED HEREWITH.
CROSS REFERENCE SHEET FOR THE
NEW SENIOR SUBORDINATED NOTES
TIA Indenture
Section Section
- ------- -------
310 (a)(1) .............................. 7.10
(a)(2) .............................. 7.10
(a)(3) .............................. N.A.
(a)(4) .............................. N.A.
(a)(5) .............................. 7.10
(b) .............................. 7.8, 7.10
(c) .............................. N.A.
311 (a) .............................. 7.11
(b) .............................. 7.11
(c) .............................. N.A.
312 (a) .............................. 2.5
(b) .............................. 11.3
(c) .............................. 11.3
313 (a) .............................. 7.6
(b)(1) .............................. N.A.
(b)(2) .............................. 7.6
(c) .............................. 11.2
(d) .............................. 7.6
314 (a) .............................. 4.2, 4.10, 11.2
(b) .............................. 4.21
(c)(1) .............................. 11.4
(c)(2) .............................. 11.4
(c)(3) .............................. N.A.
(d) .............................. N.A.
(e) .............................. 11.5
(f) .............................. 4.10
315 (a) .............................. 7.1
(b) .............................. 7.5, 11.2
(c) .............................. 7.1
(d) .............................. 7.1
(e) .............................. 6.11
316 (a)(last sentence) .............................. 2.8
(a)(1)(A) .............................. 6.5
(a)(1)(B) .............................. 6.4
(a)(2) .............................. N.A.
(b) .............................. 6.7
(c) .............................. 6.7
317 (a)(1) .............................. 6.8
(a)(2) .............................. 6.9
(b) .............................. 2.4
318 (a) .............................. 11.1
N.A. means Not Applicable.
CROSS REFERENCE SHEET FOR THE
APPLICANT'S NEW SENIOR SECURED NOTES
TIA Indenture
Section Section
- ------- ------
310 (a)(1) ........................... 7.10
(a)(2) ........................... 7.10
(a)(3) ........................... 7.12
(a)(4) ........................... N.A.
(a)(5) ........................... 7.10
(b) ........................... 7.8, 7.10
(c) ........................... N.A.
311 (a) ........................... 7.11
(b) ........................... 7.11
(c) ........................... N.A.
312 (a) ........................... 2.5
(b) ........................... 12.3
(c) ........................... 12.3
313 (a) ........................... 7.6
(b)(1) ........................... 4.7, 4.9, 7.6, 10.4,
10.6, 10.7
(b)(2) ........................... 7.6
(c) ........................... 12.2
(d) ........................... 7.6
314 (a) ........................... 4.2, 4.10, 12.2
(b) ........................... 10.3, 10.9
(c)(1) ........................... 12.4
(c)(2) ........................... 12.4
(c)(3) ........................... N.A.
(d) ........................... 10.5, 10.6, 10.7,
12.4, 12.5
(e) ........................... 12.5
(f) ........................... 4.10
315 (a) ........................... 7.1
(b) ........................... 7.5, 12.2
(c) ........................... 7.1
(d) ........................... 7.1
(e) ........................... 6.11
316 (a)(last sentence) ........................... 12.6
(a)(1)(A) ........................... 6.5
(a)(1)(B) ........................... 6.4
(a)(2) ........................... N.A.
(b) ........................... 6.7
(c) ........................... 6.7
317 (a)(1) ........................... 6.8
(a)(2) ........................... 6.9
(b) ........................... 2.4
318 (a) ........................... 12.1
N.A. means Not Applicable.
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
ANACOMP, INC.
(Exact name of obligor as specified in its charter)
Indiana 35-1144230
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
11550 North Meridian Street
P.O. Box 40888
Indianapolis, Indiana 46240
(Address of principal executive offices) (Zip code)
----------------------
11-5/8% Senior Secured Notes Due 1999
(Title of the indenture securities)
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- -------------------------------------------------------------------------
Name Address
- -------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street,
New York New York, N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza,
New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule
24 of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 26th day of April, 1996.
THE BANK OF NEW YORK
By: ___________________
Name: Paul J. Schmalzel
Title: Assistant Treasurer
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December
31, 1995, published in accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 4,500,312
Interest-bearing balances .......... 643,938
Securities:
Held-to-maturity securities ........ 806,221
Available-for-sale securities ...... 2,036,768
Federal funds sold and securities
purchased under agreements to resell in
domestic offices of the bank:
Federal funds sold ................... 4,166,720
Securities purchased under agreements
to resell........................... 50,413
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................. 27,068,535
LESS: Allowance for loan and
lease losses .............. 520,024
LESS: Allocated transfer risk
reserve...................... 1,000
Loans and leases, net of unearned
income and allowance, and reserve 26,547,511
Assets held in trading accounts ...... 758,462
Premises and fixed assets (including
capitalized leases) ................ 615,330
Other real estate owned .............. 63,769
Investments in unconsolidated
subsidiaries and associated
companies .......................... 223,174
Customers' liability to this bank on
acceptances outstanding ............ 900,795
Intangible assets .................... 212,220
Other assets ......................... 1,186,274
-----------
Total assets ......................... $42,711,907
===========
LIABILITIES
Deposits:
In domestic offices ................ $21,248,127
Noninterest-bearing ....... 9,172,079
Interest-bearing ......... 12,076,048
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 9,535,088
Noninterest-bearing .......... 64,417
Interest-bearing ......... 9,470,671
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 2,095,668
Securities sold under agreements
to repurchase .................... 69,212
Demand notes issued to the U.S.
Treasury ........................... 107,340
Trading liabilities .................. 615,718
Other borrowed money:
With original maturity of one year
or less .......................... 1,638,744
With original maturity of more than
one year ......................... 120,863
Bank's liability on acceptances exe-
cuted and outstanding .............. 909,527
Subordinated notes and debentures .... 1,047,860
Other liabilities .................... 1,836,573
-----------
Total liabilities .................... 39,224,720
-----------
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 1,995,316
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 29,668
Cumulative foreign currency transla-
tion adjustments .................. ( 5,747)
-----------
Total equity capital ................ 3,487,187
-----------
Total liabilities and equity
capital ........................... $42,711,907
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
--------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
--------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305 (b) (2)__
-------------------------------
IBJ SCHRODER BANK & TRUST COMPANY
(Exact name of trustee as specified in its charter)
New York 13-5375195
(State of Incorporation (I.R.S. employer
if not a U.S. national bank) identification No.)
One State Street, New York, New York 10004
(Address of principal executive offices) (Zip code)
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
(212) 858-2000
(Name, Address and Telephone Number of Agent for Service)
ANACOMP, INC.
(Exact name of obligor as specified in its charter)
Delaware 35-1144230
(State or jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
11550 North Meridian Street
Carmel, Indiana 46032
(Address of principal executive office) (zip code)
------------------------
13% Senior Subordinated Notes due 2002
(Title of Indenture Securities)
----------------------------------------
Item 1. General information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
New York State Banking Department, Two Rector Street, New York, New York
Federal Deposit Insurance Corporation Washington, D.C.
Federal Reserve Bank of New York Second District, 33 Liberty Street, New
York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee.
(See Note on Page 7)
Item 3. Voting securities of the trustee.
Furnish the following information as to each class of voting securities of
the trustee:
Col. A Col. B
Title of class Amount Outstanding
Not Applicable
Item 4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
(a) Title of the securities outstanding under each such other indenture 9%
Convertible Subordinated Debentures Due 1996 of Anacomp International N.V. as
Issuer and Anacomp, Inc. as Guarantor.
(b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310 (b) (1) of the
Act arises as a result of the trusteeship under any such other indenture,
including a statement as to how the indenture securities will rank as compared
with the securities issued under such other indenture.
In accordance with the terms of the Disclosure Statement for the Second
Amended Joint Plan of Reorganization of Anacomp, Inc. and certain of its
subsidiaries (the "Disclosure Statement"), on the effective date of the
obligor's Plan of Reorganization (as defined in the Disclosure Statement), the
securities listed in item 4(a) above will be deemed satisfied, discharged and
canceled and, IBJ Schroder Bank & Trust Company will act as Trustee pursuant to
an indenture under which the new 13% Senior Subordinated Notes due 2002 will be
issued.
Item 5. Interlocking directorates and similar relationships with the
obligor or underwriters.
If the trustee or any of the directors or executive officers of the trustee
is a director, officer, partner, employee, appointee, or representative of the
obligor or of any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.
Not Applicable
Item 6. Voting securities of the trustee owned by the obligor or its
officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner, and
executive officer of the obligor:
Col. A Col. B Col. C Col. D
Name of Owner Title of Class Amount owned Percent of voting
beneficially securities represented
by amount given in
Col.C
Not Applicable
Item 7. Voting securities of the trustee owned by underwriters or their
officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner and executive officer of each such underwriter:
Col. A Col. B Col. C Col. D
Name of Owner Title of Class Amount owned Percent of voting
beneficially securities represented
by amount given in
Col.C
Not Applicable
Item 8. Securities of the obligor owned or held by the trustee
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for obligations in default by the
trustee:
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D
<S> <C> <C> <C>
Title of Class Whether the securities are Amount owned beneficially Percent of class
voting or nonvoting or held as collateral represented by amount
securities security for obligations given in Col.
in default
</TABLE>
Not Applicable
Item 9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor, furnish
the following information as to each class of securities of such underwriter any
of which are so owned or held by the trustee:
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D
<S> <C> <C> <C>
Title of Class Whether the securities are Amount owned beneficially Percent of class
voting or nonvoting or held as collateral represented by amount
securities security for obligations given in Col.
in default C
Not Applicable
</TABLE>
Item 10. Ownership or holdings by the trustee of voting securities of
certain affiliates or securityholders of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting securities of the obligor
or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the
following information as to the voting securities of such person:
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D
<S> <C> <C> <C>
Title of Class Whether the securities are Amount owned beneficially Percent of class
voting or nonvoting or held as collateral represented by amount
securities security for obligations given in Col. C
in default by trustee
Not Applicable
</TABLE>
Item 11. Ownership or holdings by the trustee of any securities of a person
owning 50 percent or more of the voting securities of the obligor.
If the trustee owns beneficially or holds as collateral security security
for obligations in default any securities of a person who, to the knowledge of
the trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such any of
which are so owned or held by the trustee:
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D
<S> <C> <C> <C>
Title of Class Whether the securities are Amount owned beneficially Percent of class
voting or nonvoting or held as collateral represented by amount
securities security for obligations given in Col. C
in default by trustee
</TABLE>
Not Applicable
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
Col. A Col. B Col. C
Nature of Indebtedness Amount Outstanding Date Due
Not Applicable
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
Not Applicable
(b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been a default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
IBJ Schroder Bank & Trust Company is the Trustee under an indenture dated
as of January 1, 1981 (the "Old Indenture") pursuant to which the 9% Convertible
Subordinated Debentures Due 1996 of Anacomp International N.V. as Issuer and
Anacomp, Inc. as Guarantor were issued. The following events of default occurred
pursuant to the Old Indenture:
Default pursuant to Section 501 of the Old Indenture due to the Issuer's
and Guarantors (i) failure to make the mandatory payments of principal and
interest on the Notes due on January 15, 1996 and (ii) the filing by the Issuer
and the Guarantor on January 5, 1996 of voluntary petitions for relief under
Chapter 11 of the United States Bankruptcy Code.
Item 14. Affiliations with the Underwriters
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not Applicable
Item 15. Foreign Trustees.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be qualified
under the Act.
Not Applicable
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
*1. A copy of the Charter of IBJ Schroder Bank & Trust Company as amended
to date. (See Exhibit 1A to Form T-1, Securities and Exchange Commission File
No. 22- 18460).
*2. A copy of the Certificate of Authority of the Trustee to Commence
Business (Included in Exhibit I above).
*3. A copy of the Authorization of the Trustee to exercise corporate trust
powers, as amended to date (See Exhibit 4 to Form T-1, Securities and Exchange
Commission File No. 22-19146).
*4. A copy of the existing By-Laws of the Trustee, as amended to date (See
Exhibit 4 to Form T-1, Securities and Exchange Commission File No. 22-19146).
5. A copy of each Indenture referred to in Item 4, if the Obligor is in
default. (See Item 4).
6. The consent of the United States institutional trustee required by
Section 321(b) of the Act. (See Exhibit 6).
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining authority.
(See Exhibit 7).
* The Exhibits thus designated are incorporated herein by reference as
exhibits hereto. Following the description of such Exhibits is a reference to
the copy of the Exhibit heretofore filed with the Securities and Exchange
Commission, to which there have been no amendments or changes.
NOTE
In answering any item in this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor and its directors or
officers, the trustee has relied upon information furnished to it by the
obligor.
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base responsive answers to Item 2, the answer
to said Item are based on incomplete information.
Item 2, may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, IBJ Schroder Bank & Trust Company, a corporation organized
and existing under the laws of the State of New York, has duly caused this
statement of eligibility & qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of New York, and State
of New York, on the 29th day of April, 1996.
IBJ SCHRODER BANK & TRUST COMPANY
By \s\ Thomas J. Bogert
Thomas J. Bogert
Assistant Vice President
Exhibit 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, as amended, in connection with the issue by Anacomp, Inc.
of its 13% Senior Subordinated Notes due 2002 we hereby consent that reports of
examinations by Federal, State, Territorial, or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
IBJ SCHRODER BANK & TRUST COMPANY
By: \s\ Thomas J. Bogert
Thomas J. Bogert
Assistant Vice President
Dated: April 29, 1996
EXHIBIT 7
CONSOLIDATED REPORT OF CONDITION OF
IBJ SCHRODER BANK & TRUST COMPANY
of New York, New York
And Foreign and Domestic Subsidiaries
Report as of December 31, 1995
Dollar Amounts in Thousands
ASSETS
<TABLE>
<CAPTION>
<S> <C>
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin ..................................$ 22,187
Interest-bearing balances..............................................................$ 160,833
Securities: Held to Maturity............................................................$ 167,109
Available-for-sale..........................................................$ 27,914
Federal funds sold and securities purchased under
agreements to resell in domestic offices of the bank
and of its Edge and Agreement subsidiaries and in IBFs:
Federal Funds sold.....................................................................$ 179,394
Securities purchased under agreements to resell........................................$ -0-
Loans and lease financing receivables:
Loans and leases, net of unearned income.............................$ 1,645,286
LESS: Allowance for loan and lease losses............................$ 52,532
LESS: Allocated transfer risk reserve................................$ -0-
Loans and leases, net of unearned income, allowance, and reserve.......................$ 1,592,754
Assets held in trading accounts............................................................$ 220
Premises and fixed assets..................................................................$ 7,349
Other real estate owned....................................................................$ 397
Investments in unconsolidated subsidiaries and associated companies........................$ -0-
Customers' liability to this bank on acceptances outstanding...............................$ 684
Intangible assets..........................................................................$ -0-
Other assets...............................................................................$ 66,374
TOTAL ASSETS...............................................................................$ 2,225,215
LIABILITIES
Deposits:
In domestic offices....................................................................$ 623,883
Noninterest-bearing .............................................$ 213,535
Interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . $ 410,348
In foreign offices, Edge and Agreement subsidiaries, and IBFs..........................$ 830,812
Noninterest-bearing . . . . . . . . . . . . . . . . . . . . . . .$ 19,160
Interest-bearing . . . . . . . . . . . . . . . . . . . . . . . ..$ 811,652
Federal funds purchased and securities sold
under agreements to repurchase in domestic offices
of the bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal Funds purchased................................................................$ 38,000
Securities sold under agreements to repurchase.........................................$ -0-
Demand notes issued to the U.S. Treasury...................................................$ 118
Trading Liabilities........................................................................$ 135
Other borrowed money:
a) With original maturity of one year or less..........................................$ 453,347
b) With original maturity of more than one year........................................$ -0-
Mortgage indebtedness and obligations under capitalized leases.............................$ -0-
Bank's liability on acceptances executed and outstanding...................................$ 684
Subordinated notes and debentures..........................................................$ -0-
Other liabilities..........................................................................$ 74,052
TOTAL LIABILITIES..........................................................................$ 2,021,031
Limited life preferred stock and related surplus...........................................$ -0-
EQUITY CAPITAL
Perpetual preferred stock..................................................................$ -0-
Common Stock...............................................................................$ 29,649
Surplus....................................................................................$ 217,008
Undivided profits and capital reserves.....................................................$ (42,438)
Plus: Net unrealized gains (losses) on marketable equity securities.....................$ (35)
Cumulative foreign currency translation adjustments........................................$ -0-
TOTAL EQUITY CAPITAL.......................................................................$ 204,184
TOTAL LIABILITIES AND EQUITY CAPITAL.......................................................$ 2,225,215
</TABLE>
Exhibit 4(a)
[Draft--4/26/96]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ANACOMP, INC.
11-5/8% Senior Secured Notes due 1999
-----------------------------------------
INDENTURE
Dated as of _________, 1996
-----------------------------------------
THE BANK OF NEW YORK,
Trustee
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
------------------------------------------
SECTION 1.1. Definitions........................................... 1
SECTION 1.2. Other Definitions..................................... 20
SECTION 1.3. Incorporation by Reference of Trust
Indenture Act........................................ 20
SECTION 1.4. Rules of Construction................................. 21
ARTICLE 2
THE SECURITIES
--------------
SECTION 2.1. Form and Dating...................................... 22
SECTION 2.2. Execution and Authentication......................... 22
SECTION 2.3. Registrar and Paying Agent........................... 23
SECTION 2.4. Paying Agent To Hold Money in Trust.................. 23
SECTION 2.5. Securityholder Lists................................. 23
SECTION 2.6. Transfer and Exchange................................ 24
SECTION 2.7. Book-Entry Provisions for Global Securities.......... 24
SECTION 2.8. Certificated Securities.............................. 25
SECTION 2.9. Replacement Securities............................... 25
SECTION 2.10. Outstanding Securities............................... 25
SECTION 2.11. Temporary Securities................................. 26
SECTION 2.12. Cancellation......................................... 26
SECTION 2.13. Defaulted Interest................................... 26
SECTION 2.14. Record Date.......................................... 27
SECTION 2.15. CUSIP Numbers........................................ 27
ARTICLE 3
REDEMPTION
----------
SECTION 3.1. Notices to Trustee.................................... 28
SECTION 3.2. Selection of Securities To Be Redeemed................ 28
SECTION 3.3. Notice of Redemption.................................. 29
SECTION 3.4. Effect of Notice of Redemption........................ 29
SECTION 3.5. Deposit of Redemption Price........................... 30
SECTION 3.6. Securities Redeemed in Part........................... 30
<PAGE>
ARTICLE 4
COVENANTS
---------
PAGE
----
SECTION 4.1. Payment of Securities................................ 30
SECTION 4.2. SEC Reports.......................................... 30
SECTION 4.3. Limitation on Indebtedness........................... 31
SECTION 4.4. Limitation on Restricted Subsidiary
Indebtedness and Preferred Stock..................... 33
SECTION 4.5. Limitation on Restricted Payments.................... 33
SECTION 4.6. Limitation on Restrictions on
Distributions from Restricted
Subsidiaries......................................... 34
SECTION 4.7. Limitation on Sales of Assets and
Restricted Subsidiary Stock.......................... 35
SECTION 4.8. Limitation on Transactions with
Affiliates........................................... 40
SECTION 4.9. Change of Control.................................... 41
SECTION 4.10. Compliance Certificate............................... 44
SECTION 4.11. Further Instruments and Acts......................... 45
SECTION 4.12. Limitation on Liens and Impairment of
Collateral........................................... 45
SECTION 4.13. Limitation on Issuance and Sale of
Capital Stock of Restricted
Subsidiaries......................................... 45
SECTION 4.14. Restricted and Unrestricted
Subsidiaries......................................... 45
SECTION 4.15. After-Acquired Property.............................. 46
SECTION 4.16. Revisions to Schedules............................... 46
SECTION 4.17. Maintenance of Properties;
Insurance............................................ 46
SECTION 4.18. Corporate Existence.................................. 47
SECTION 4.19. Taxes................................................ 47
SECTION 4.20. Conflicting Agreements............................... 47
SECTION 4.21. Capital Expenditures................................. 47
SECTION 4.22. Interest Coverage Ratio.............................. 48
-2-
<PAGE>
PAGE
----
ARTICLE 5
SUCCESSOR COMPANY
-----------------
ARTICLE 6
DEFAULTS AND REMEDIES
---------------------
SECTION 6.1. Events of Default................... 50
SECTION 6.2. Acceleration........................ 52
SECTION 6.3. Other Remedies...................... 53
SECTION 6.4. Waiver of Past Defaults............. 53
SECTION 6.5. Control by Majority................. 53
SECTION 6.6. Limitation on Suits................. 53
SECTION 6.7. Rights of Holders To Receive Payment 54
SECTION 6.8. Collection Suit by Trustee.......... 54
SECTION 6.9. Trustee May File Proofs of Claim.... 54
SECTION 6.10. Priorities.......................... 54
SECTION 6.11. Undertaking for Costs............... 55
SECTION 6.12. Waiver of Stay or Extension Laws.... 55
SECTION 6.13. Suits To Protect the Collateral..... 55
ARTICLE 7
TRUSTEE
-------
SECTION 7.1. Duties of Trustee.................... 56
SECTION 7.2. Rights of Trustee.................... 57
SECTION 7.3. Individual Rights of Trustee......... 57
SECTION 7.4. Trustee's Disclaimer................. 57
SECTION 7.5. Notice of Defaults................... 57
SECTION 7.6. Reports by Trustee to Holders........ 58
SECTION 7.7. Compensation and Indemnity........... 58
SECTION 7.8. Replacement of Trustee............... 59
SECTION 7.9. Successor Trustee by Merger.......... 59
SECTION 7.10. Eligibility; Disqualification........ 60
SECTION 7.11. Preferential Collection of Claims
Against Company...................... 60
SECTION 7.12. Appointment of Co-Trustee or Separate
Trustee.............................. 60
-3-
<PAGE>
PAGE
----
ARTICLE 8
DISCHARGE OF INDENTURE
----------------------
SECTION 8.1. Discharge of Liability on
Securities.......................... 62
SECTION 8.2. Application of Trust Money.......... 62
SECTION 8.3. Repayment to Company................ 62
SECTION 8.4. Indemnity for Government Obligations 63
SECTION 8.5. Reinstatement....................... 63
ARTICLE 9
AMENDMENTS AND WAIVERS
----------------------
SECTION 9.1. Without Consent of Holders........... 63
SECTION 9.2. With Consent of Holders.............. 64
SECTION 9.3. Compliance with Trust Indenture Act.. 65
SECTION 9.4. Revocation and Effect of Consents and
Waivers.............................. 65
SECTION 9.5. Notation on or Exchange of
Securities........................... 66
SECTION 9.6. Trustee To Sign Amendments........... 66
SECTION 9.7. Payment for Consent.................. 66
ARTICLE 10
COLLATERAL DOCUMENTS
--------------------
SECTION 10.1. Collateral Documents............... 66
SECTION 10.2. General Authority.................. 67
SECTION 10.3. Recording, Deposit of Pledged
Securities, etc.................... 68
SECTION 10.4. Disposition of Collateral Without
Trustee Consent.................... 70
SECTION 10.5. Disposition of Inventory and Accounts
Receivable Without Release......... 72
SECTION 10.6. Release of Collateral with Trustee
Consent............................ 73
SECTION 10.7. Substitute Collateral.............. 76
-4-
<PAGE>
PAGE
----
SECTION 10.8. Eminent Domain and Other Governmental
Takings................................. 78
SECTION 10.9. TIA Requirements........................ 80
SECTION 10.10. Suits to Protect the Collateral......... 80
SECTION 10.11. Purchaser Protected..................... 80
SECTION 10.12. Powers Exercisable by Receiver or
Trustee................................. 81
SECTION 10.13. Disposition of Obligations Received..... 81
SECTION 10.14. Limitation on Duty of Trustee in Respect
of Collateral; Indemnification.......... 81
SECTION 10.15. Release upon Termination of the
Company's Obligations................... 82
ARTICLE 11
APPLICATION OF TRUST MONIES
---------------------------
SECTION 11.1. "Trust Monies" Defined................... 83
SECTION 11.2. Retirement of Securities................. 83
SECTION 11.3. Withdrawals of Insurance Proceeds and
Condemnation Awards...................... 84
SECTION 11.4. Release of Real Estate Tax Monies;
Rents.................................... 86
SECTION 11.5. Powers Exercisable Notwithstanding
Event of Default......................... 87
SECTION 11.6. Powers Exercisable by Trustee or
Receiver................................. 87
SECTION 11.7. Disposition of Securities Retired........ 87
SECTION 11.8. Investment of Trust Monies............... 87
ARTICLE 12
MISCELLANEOUS
-------------
SECTION 12.1. Trust Indenture Act Controls............ 88
SECTION 12.2. Notices................................. 88
SECTION 12.3. Communication by Holders with Other
Holders................................. 89
SECTION 12.4. Certificate and Opinion as to
Conditions Precedent.................... 89
-5-
<PAGE>
PAGE
----
SECTION 12.5. Statements Required in Certificate
or Opinion.............................. 89
SECTION 12.6. Rules by Trustee, Paying Agent and
Registrar............................... 89
SECTION 12.7. Legal Holidays.......................... 90
SECTION 12.8. Governing Law........................... 90
SECTION 12.9. No Recourse Against Others.............. 90
SECTION 12.10. Successors.............................. 90
SECTION 12.11. Multiple Originals...................... 90
SECTION 12.12. Table of Contents; Headings............. 90
SECTION 12.13. Severability............................ 90
Exhibit A - Form of Security
Exhibit B - Form of Mortgage
Exhibit C - Form of Security and Pledge Agreement
Schedule I - Indebtedness to be Outstanding Immediately After the Issue Date
Schedule II - Liens to be Outstanding Immediately After the Issue Date
Schedule III - U.S. Restricted Subsidiaries
Schedule IV - Jurisdictions for UCC Filings
Schedule V - Jurisdictions for Real Property Filings and Recordings
-6-
<PAGE>
INDENTURE dated as of ______________, 1996, between ANACOMP, INC., a
Delaware corporation (the "Company"), successor to Anacomp, Inc., an Indiana
corporation, and THE BANK OF NEW YORK, a New York banking corporation (the
"Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's 11-5/8% Senior
Secured Notes due 1999 (the "Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
------------------------------------------
SECTION 1.1. Definitions.
-----------
"Affiliate" of any specified Person means (i) any other Person,
---------
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person or (ii) any other Person who is a
director or officer (A) of such specified Person, (B) of any subsidiary of such
specified Person or (C) of any Person described in clause (i). For the purposes
of this definition, "control" when used with respect to any Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise;and the terms "controlling" and "controlled" have meanings correlative
to the foregoing. Notwithstanding the foregoing, each Unrestricted Subsidiary
shall be deemed an Affiliate of the Company and of each other Subsidiary of the
Company.
"Asset Disposition" means any direct or indirect sale, lease, transfer,
-----------------
conveyance or other disposition (or series of related sales, leases, transfers,
conveyances or dispositions) of shares of Capital Stock (including, without
limitation, the Pledged Securities) of any Restricted Subsidiary (other than
directors' qualifying shares), property or other assets (each referred to for
the purposes of this definition as a "disposition") by the Company or any
Restricted Subsidiary (including any disposition by means of a merger,
consolidation or similar transaction), other than (i) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (ii) a disposition of the Company's or
any Restricted Subsidiary's accounts receivable, lease receivables or inventory
(other than the disposition of inventory pursuant to a Sale/Leaseback
Transaction) at Fair Market Value in the Ordinary Course of Business, (iii) a
disposition of property or assets, whether in a single transaction or a series
of related transactions which constitute a single plan of disposition, that have
an aggregate Fair Market Value not in excess of $100,000, (iv) an operating
lease entered into in the ordinary course of business with respect to property,
plant or equipment that in the judgment of the Board of Directors constitutes
excess capacity or (v) a "like-kind exchange" of an asset in exchange for an
asset of a third party, so long as, in the judgment of the Company's Board of
Directors, the asset received by the Company or such Restricted Subsidiary in
such exchange (x) has a Fair Market Value at least equal to the fair market
value of the asset transferred by
-1-
<PAGE>
the Company or such Restricted Subsidiary and (y) is usable in a Permitted Line
of Business to at least the same extent as the asset transferred by the Company
or such Restricted Subsidiary. An Asset Disposition shall include the
requisition of title to, seizure of or forfeiture of any property or assets, or
any actual or constructive total loss or an agreed or compromised total loss of
any property or assets. The term "Asset Disposition" when used with respect to
the Company shall not include any disposition pursuant to Article 5 which
constitutes a disposition of all or substantially all the assets of the Company.
"Attributable Indebtedness", in respect of a Sale/Leaseback
-------------------------
Transaction, means, as at the time of determination, the greater of (i) the Fair
Market Value of the property subject to such Sale/Leaseback Transaction (as
determined in good faith by the Board of Directors) or (ii) the present value
(discounted at the interest rate borne by the Securities, compounded annually)
of the total obligations of the lessee for rental payments during the remaining
term of the lease included in such Sale/Leaseback Transaction (including any
period for which such lease has been extended).
"Average Life" means, as of the date of determination, with respect to
------------
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of (a) the number of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock and (b) the
amount of such payment by (ii) the sum of all such payments.
"Board of Directors" means the Board of Directors of the Company or any
------------------
committee thereof duly authorized to act on behalf of such Board.
"Board Resolution" means a duly adopted resolution of the Board of
----------------
Directors in full force and effect at the time of determination and certified as
such by the Secretary or an Assistant Secretary of the Company.
"Business Day" means each day which is not a Legal Holiday.
------------
"Capital Lease Obligations" means an obligation that is required to be
-------------------------
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP; the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests,
-------------
rights to purchase, warrants, options, participations or other equivalents of or
interests (including partnership interests) in (however designated) equity of
such Person, including any Preferred Stock, but excluding any debt securities
convertible-into such equity.
-2-
<PAGE>
"Change of Control" means the occurrence of any of the following
-----------------
events: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than an underwriter engaged in a firm commitment
underwriting in connection with a public offering of the Voting Stock of the
Company or a Restricted Subsidiary, is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person
shall be deemed to have "beneficial ownership" of all shares that any such
person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more than 50% of
the total voting power of the Voting Stock of the Company; (ii) during any
period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board or whose nomination for election by the
shareholders of the Company was approved by a vote of a majority of the
directors of the Company then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of such
Board then in office; or (iii) the Company, either individually or in
conjunction with one or more of its Subsidiaries, sells, conveys, leases or
otherwise transfers, or one or more of such Subsidiaries sell, convey, lease or
otherwise transfer, all or substantially all the assets of the Company and the
Restricted Subsidiaries, taken as a whole, to any Person (other than a
Restricted Subsidiary).
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Collateral" means the property and assets subject to the Lien of the
----------
Indenture or any of the other Collateral Documents.
"Collateral Documents" means the Indenture, the Security and Pledge
--------------------
Agreement, the Mortgages and each other document, agreement or instrument
evidencing, perfecting, assuring or otherwise relating to the Lien in respect of
the Collateral and all amendments, supplements or other modifications thereto.
"Commodity Price Protection Agreement" means, in respect of a Person,
------------------------------------
any forward contract, commodity swap agreement, commodity option agreement or
other similar agreement or arrangement designed to protect such Person against
fluctuations in commodity prices.
"Company" means the party named as such in this Indenture until a
-------
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Consolidated Coverage Ratio" means, as of any date of determination,
---------------------------
the ratio of (i) the amount of EBITDA for the period of the most recent four
consecutive fiscal quarters ending at least 45 days prior to the date of such
determination to (ii) Consolidated Interest Expense for such four fiscal
quarters; provided, however, that (1) if the Company or any Restricted
-------- -------
Subsidiary has Incurred any Indebtedness since the beginning of such period
-3-
<PAGE>
that remains outstanding or if the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, or
both, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving effect on a pro forma basis to such Indebtedness as if
--- -----
such Indebtedness had been Incurred on the first day of such period and the
discharge of any other Indebtedness repaid, repurchased, defeased or otherwise
discharged with the proceeds of such new Indebtedness as if such discharge had
occurred on the first day of such period, (2) if since the beginning of such
period the Company or any Restricted Subsidiary shall have made any Asset
Disposition, EBITDA for such period shall be reduced by an amount equal to
EBITDA (if positive) directly attributable to the property or assets which are
the subject of such Asset Disposition for such period, or increased by an amount
equal to EBITDA (if negative) directly attributable thereto for such period and
Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Company and the continuing
Restricted Subsidiaries in connection with such Asset Dispositions for such
period (or, if the Capital Stock of any Restricted Subsidiary is sold,
Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Company and the
continuing Restricted Subsidiaries are no longer liable for such Indebtedness
after such sale), (3) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an Investment in
any Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary)
or an acquisition of assets, including any acquisition of assets occurring in
connection with a transaction causing a calculation to be made hereunder, which
constitutes all or substantially all of an operating unit of a business, EBITDA
and Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the Incurrence of any Indebtedness)
--- -----
as if such Investment or acquisition occurred on the first day of such period
and (4) if since the beginning of such period any Person (that subsequently
became a Restricted Subsidiary or was merged with or into the Company or any
Restricted Subsidiary since the beginning of such period) shall have made any
Asset Disposition or any Investment that would have required an adjustment
pursuant to clause (2) or (3) above if made by the Company or a Restricted
Subsidiary during such period, EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving pro forma effect thereto as if such
--- -----
Asset Disposition or Investment occurred on the first day of such period. For
purposes of this definition, whenever pro forma effect is to be given to an
--- -----
acquisition of assets, the amount of income or earnings relating thereto and the
amount of Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations shall be determined
--- -----
in good faith by a responsible financial or accounting Officer of the Company
and as further contemplated by the definition of pro forma. If any Indebtedness
--- -----
bears a floating rate of interest and is being given pro forma effect, the
interest expense on such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period (taking into account any Interest Rate Protection Agreement applicable to
such Indebtedness if such Interest Rate Protection Agreement has a remaining
term in excess of 12 months).
-4-
<PAGE>
"Consolidated Interest Expense" means, for any period, the sum of (i)
-----------------------------
the total cash and noncash interest expense of the Company and its consolidated
Subsidiaries, plus, to the extent not included in such interest expense, (A)
interest expense attributable to Capital Lease Obligations, (B) amortization of
debt discount and debt issuance cost, (C) capitalized interest, (D) accrued
interest, (E) commissions, discounts and other fees and charges paid or owed
with respect to letters of credit and bankers' acceptance financing, (F)
interest actually paid by the Company or any such Subsidiary under any Guarantee
of Indebtedness or other obligation of any other Person, (G) net costs
associated with Hedging Obligations (including amortization of discounts and
fees), (H) the interest portion of any deferred obligation, (I) Preferred Stock
dividends in respect of all Preferred Stock of Subsidiaries of the Company and
Redeemable Stock of the Company held by Persons other than the Company or a
Wholly Owned Subsidiary and (J) cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the
Company) in connection with Indebtedness Incurred by such plan or trust
(provided, however, that there shall be excluded from this clause (i), (x) any
- --------- -------
such interest expense of any Unrestricted Subsidiary to the extent the related
Indebtedness is not Guaranteed or paid by the Company or any Restricted
Subsidiary and (y) any such interest expense attributable to original issue
discount as a result of Fresh Start Accounting adjustments), less (ii) to the
extent included in clause (i), amortization or write-off of deferred financing
costs of the Company and its consolidated Subsidiaries during such period and
any charge related to any premium or penalty paid in connection with redeeming
or retiring any Indebtedness of the Company and its consolidated Subsidiaries
prior to its Stated Maturity.
"Consolidated Net Income" means, for any period, the net income (loss)
-----------------------
of the Company and its consolidated Subsidiaries for such period determined in
accordance with GAAP but excluding for such purpose the impact of any Fresh
Start Accounting adjustment; provided, however, that there shall not be included
-------- -------
in such Consolidated Net Income (i) any net income (loss) of any Person if such
Person is not a Restricted Subsidiary, except that (A) subject to the
limitations contained in (iv) below, the Company's equity in the net income of
any such Person for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such Person
during such period to the Company or a Restricted Subsidiary as a dividend or
other distribution (subject, in the case of a dividend or other distribution to
a Restricted Subsidiary, to the limitations contained in clause (iii) below) and
(B) the Company's equity in a net loss of any such Person (other than an
Unrestricted Subsidiary) for such period shall be included in determining such
Consolidated Net Income, (ii) any net income (loss) of any person acquired by
the Company or a Restricted Subsidiary in a pooling of interests transaction for
any period prior to the date of such acquisition, (iii) any net income (loss) of
any Restricted Subsidiary if such Restricted Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the making
of distributions by such Restricted Subsidiary, directly or indirectly, to the
Company, except that (A) subject to the limitations contained in (iv) below, the
Company's equity in the net income of any such Restricted Subsidiary for such
period shall be included in such Consolidated Net Income up to the aggregate
amount of cash that could have been distributed by such Restricted Subsidiary
during such period to
-5-
<PAGE>
the Company or another Restricted Subsidiary as a dividend (subject, in the case
of a dividend to another Restricted Subsidiary, to the limitation contained in
this clause) and (B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such Consolidated
Net Income, (iv) any gain (but not loss) realized upon the sale or other
disposition of any property, plant or equipment of the Company or its
consolidated Subsidiaries (including pursuant to any Sale/Leaseback Transaction)
which is not sold or otherwise disposed of in the ordinary course of business,
(v) any gain (but not loss) realized upon the sale or other disposition of any
Capital Stock of any Person, (vi) any extraordinary gain or loss, (vii) the
cumulative effect of a change in accounting principles and (viii) any
nonrecurring restructuring charges for any fiscal quarter in the Fiscal Year of
the Company commencing October 1, 1995.
"Consolidated Tangible Net Worth" means the amount by which (i) the
-------------------------------
total of the amounts shown on the balance sheet of the Company and its
consolidated Subsidiaries, determined on a consolidated basis in accordance with
GAAP, as of the end of the most recent fiscal quarter of the Company ending at
least 45 days prior to the taking of any action for the purpose of which the
determination is being made, as (x) the par or stated value of all outstanding
Capital Stock of the Company plus (y) paid-in capital or capital surplus
relating to such Capital Stock plus (z) any retained earnings or earned surplus
exceeds (ii) the sum of (A) any accumulated deficit, (B) any amounts
attributable to Disqualified Stock, (C) the amounts appearing on the assets side
of such balance sheet for all contracts, patents, trademarks, copyrights and
other intellectual property rights, franchises, licenses, goodwill, treasury
stock, unamortized debt discount and expense and similar intangibles, (D) any
increase in the amount of capitalized research and development and capitalized
interest subsequent to the Issue Date, and (E) the amount of any write-up
subsequent to the Issue Date in the book value of any asset owned on the Issue
Date resulting from the revaluation thereof subsequent to such date, or any
write-up in excess of the cost of any asset acquired subsequent to that date.
"Currency Exchange Protection Agreement" means, in respect of any
--------------------------------------
Person, any foreign exchange contract, currency swap agreement, currency option
or other similar agreement or arrangement designed to protect such Person
against fluctuations in foreign currency exchange rates.
"Default" means any event which is, or after notice or passage of time
-------
or both would be, an Event of Default.
"Depositary" shall mean The Depository Trust Company, its nominees, and
----------
their respective successors.
"Disqualified Stock" of a Person means Redeemable Stock of such Person
------------------
as to which the maturity, mandatory redemption, conversion or exchange or
redemption at the option of the Holder thereof occurs, or may occur, on or prior
to the first anniversary of the Stated Maturity of the Securities.
-6-
<PAGE>
"Dollar Equivalent" means, with respect to any monetary amount in a
-----------------
currency other than U.S. dollars, at any time for the determination thereof, the
amount of U.S. dollars obtained by converting such foreign currency involved in
such computation into U.S. dollars at the spot rate for the purchase of U.S.
dollars with the applicable foreign currency as quoted by _________________ in
New York City at approximately 11:00 a.m. (New York time) on the date two
Business Days prior to such determination.
"EBITDA" for any period means the Consolidated Net Income for such
------
period, plus, to the extent deducted in calculating such Consolidated Net
Income, (i) income tax expense, (ii) Consolidated Interest Expense, (iii)
depreciation expense, (iv) amortization expense and (v) any charge related to
any premium or penalty paid in connection with redeeming or retiring any
Indebtedness prior to its Stated Maturity, in each case for such period.
"Exchange Act" means the Securities Exchange Act of 1934.
------------
"Fair Market Value" means, with respect to any asset or property, the
-----------------
price which could be negotiated in an arm's-length free market transaction, for
cash, between a willing seller and a willing buyer, neither of whom is under
undue pressure or compulsion to complete the transaction; provided, that the
--------
foregoing shall not prohibit sales of inventory at a discount or on terms which
are typical in the industry to which such inventory relates. Fair Market Value
shall be determined, except as otherwise provided herein, (i) if such property
or asset has a Fair Market Value less than $5,000,000, by any officer of the
Company or (ii) if such property or asset has a Fair Market Value in excess of
$5,000,000, by the Board of Directors as a whole and evidenced by a Board
Resolution, dated within 30 days of the relevant transaction, of the Board of
Directors delivered to the Trustee.
"Fiscal Year" means a fiscal year of the Company commencing on October
-----------
1 and ending on September 30 (or such other fiscal year as the Company may
hereafter adopt). The Company's initial Fiscal Year shall end on September 30,
1996.
"Foreclosure Event" means any foreclosure upon and enforcement of the
-----------------
Lien of the Collateral Documents by the Trustee.
"Foreign Asset Disposition" means an Asset Disposition in respect of
-------------------------
Capital Stock or assets of a Restricted Subsidiary of the type described in
Section 936 of the Code to the extent that the proceeds of such Asset
Disposition are received by a Person subject in respect of such proceeds to the
tax laws of a jurisdiction other than the United States of America, any State
thereof or the District of Columbia.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary that is
-----------------------------
incorporated in a jurisdiction other than the United States of America, any
State thereof or the District of Columbia.
-7-
<PAGE>
"Fresh Start Accounting" means Fresh Start Accounting as described in
----------------------
Statement of Position 90-7, "Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code" (Am. Inst. of Certified Public Accountants 1990), as
then in effect, or any comparable statement then in effect.
"GAAP" means generally accepted accounting principles in the United
----
States of America as in effect as of the Issue Date, including those set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained in
this Indenture shall be computed in conformity with GAAP consistently applied,
except as otherwise expressly provided in this Indenture.
"Guarantee" means any obligation, contingent or otherwise, of any
---------
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or by agreement
to keepwell, to purchase assets, goods, securities or services, to take-or-pay
or to maintain financial statement conditions or otherwise) or (ii) entered into
for purposes of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided, however, that the term
-------- -------
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Hedging Obligations" of any Person means the obligations of such
-------------------
Person pursuant to any Interest Rate Protection Agreement, Commodity Price
Protection Agreement or Currency Exchange Protection Agreement or other similar
agreement or arrangement.
"Holder" or "Securityholder" means the Person in whose name a Security
------ --------------
is registered on the Registrar's books.
"Incur" means to, directly or indirectly, create, issue, assume,
-----
Guarantee, incur (by conversion, exchange or otherwise) extend, assume, or
otherwise become liable for, contingently or otherwise; provided, however, that
-------- -------
any Indebtedness or Capital Stock of a Person existing at the time such Person
becomes a Subsidiary (whether by merger, consolidation, acquisition or
otherwise) will be deemed to be incurred by such Subsidiary at the time it
becomes a Subsidiary. The terms "Incurrence", "Incurred" and "Incurring" shall
each have a correlative meaning.
"Indebtedness" means, with respect to any Person on any date of
------------
determination (without duplication),
-8-
<PAGE>
(i) the principal of and premium (if any) in respect of indebtedness
of such Person for borrowed money;
(ii) the principal of and premium (if any) in respect of obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments;
(iii) all Capital Lease Obligations and all Attributable Indebtedness
of such Person;
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except (A) Trade Payables and (B)
any obligation to pay any portion of such purchase price that becomes due
only if the earnings attributable to such property or services satisfy
predetermined minimum amounts subsequent to the purchase of such property
or services and the amount of such obligation cannot be determined on the
date of such purchase);
(v) all obligations of such Person in respect of letters of credit,
banker's acceptances or other similar instruments or credit transactions
(including reimbursement obligations with respect thereto), other than
obligations with respect to letters of credit securing obligations (other
than obligations described in (i) through (iv) above) entered into in the
ordinary course of business of such Person to the extent such letters of
credit are not drawn upon or, if and to the extent drawn upon, such drawing
is reimbursed no later than the third Business Day following receipt by
such Person of a demand for reimbursement following payment on any such
letter of credit;
(vi) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or,
with respect to any Subsidiary of such Person, any Preferred Stock (but
excluding, in each case, any accrued dividends);
(vii) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person;
provided, however, that the amount of such Indebtedness shall be the lesser
-------- -------
of (A) the Fair Market Value of such asset at such date of determination
and (B) the amount of such Indebtedness of such other Persons;
(viii) all Indebtedness of other Persons to the extent Guaranteed by
such Person; and
(ix) to the extent not otherwise included in this definition,
obligations of such Person in respect of Hedging Obligations.
For purposes of this definition, the maximum fixed redemption, repayment or
repurchase price of any Disqualified Stock or Preferred Stock that does not have
a fixed redemption, repayment or repurchase price shall be calculated in
accordance with the terms of such Stock
-9-
<PAGE>
as if such Stock were redeemed, repaid or repurchased on any date on which
Indebtedness shall be required to be determined pursuant to the Indenture;
provided, however, that if such Stock is not then permitted to be redeemed,
- -------- -------
repaid or repurchased, the redemption, repayment or repurchase price shall be
the book value of such Stock as reflected in the most recent financial
statements of such Person. The amount of Indebtedness of any Person at any date
shall be the outstanding balance at such date of all unconditional obligations
as described above and the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations at such
date.
"Indenture" means this instrument as originally executed or as it may
---------
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the TIA that are deemed to be a part of and govern
this instrument, and any such supplemental indenture, respectively.
"Indenture Obligations" means the obligations of the Company (and any
---------------------
other obligor hereunder or under the Securities) to pay principal of, and
premium, if any, and interest on, the Securities when due and payable, whether
at maturity, by acceleration, call for redemption or repurchase, in each case as
required hereunder, and all other amounts due or to become due under or in
connection with this Indenture, the Securities and the other Collateral
Documents and the performance of all other obligations to the Trustee and the
Holders under this Indenture, the Securities and the other Collateral Documents,
according to the terms hereof and thereof.
"Interest Rate Protection Agreement" means, in respect of any Person,
----------------------------------
any interest rate swap agreement, interest rate option agreement, interest rate
cap agreement, interest rate collar agreement, interest rate floor agreement or
other similar agreement or arrangement designed to protect such Person against
fluctuations in interest rates.
"Investment" in any Person means any direct or indirect advance, loan
----------
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person) or other
extension of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of others)
such Person, or any purchase or acquisition of all or substantially all the
business or assets of, Capital Stock, Indebtedness, any other evidence of
beneficial ownership or other similar instruments issued by, such Person. For
purposes of Sections 4.5 and 4.14, (i) the term "Investment" shall include the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the Fair Market Value of the net assets of any Subsidiary of the Company at the
time that such Subsidiary is designated an Unrestricted Subsidiary; provided,
--------
however, that upon a redesignation of such Subsidiary as a Restricted
- -------
Subsidiary, the Company shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to
(x) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion
-10-
<PAGE>
(proportionate to the Company's equity interest in such Subsidiary) of the Fair
Market Value of the net assets of such Subsidiary at the time that such
Subsidiary is so re-designated as a Restricted Subsidiary; and (ii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its Fair
Market Value at the time of such transfer. In determining the amount of any
Investment in respect of any property or asset other than cash, such property or
asset shall be valued at its Fair Market Value at the time of such Investment
(unless otherwise specified in this definition).
"Issue Date" means the first date on which Securities are issued
----------
pursuant to this Indenture.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
----
assignment, deposit arrangement, preference, priority, security interest,
encumbrance, easement, restriction, covenant, right-of-way, servitude, lien
(statutory or otherwise), charge, other security or similar agreement or
preferential arrangement of any kind or nature whatsoever or other adverse claim
of any kind or nature (including, without limitation, any conditional sale or
other title retention agreement or lease having substantially the same economic
effect of any of the foregoing).
"Magnetics Division" means the property and assets of the Company or
------------------
any Restricted Subsidiary used in connection with the manufacture, marketing and
sale of magnetic tape, computer tape or other magnetic products.
"Mortgage" means a fee or leasehold mortgage instrument or deed of
--------
trust with any related security agreements and assignments of lease and rents to
secure the Indenture Obligations, substantially in the form of Exhibit B
(including such changes to such form as may be necessary or desirable to conform
such form to the local laws or customs applicable to property in the
jurisdiction where such mortgage instrument or deed of trust is to be recorded),
as the same may be amended, supplemented or otherwise modified from time to time
in accordance with the terms thereof, hereof and of any other Collateral
Document.
"Net Cash Proceeds" from an Asset Disposition means the sum of (i) cash
-----------------
payments and Temporary Cash Investments received (including any cash payments
received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when received, but
excluding any other consideration received in the form of assumption by the
acquiring person of Indebtedness or other obligations relating to such
properties or assets or received in any other non-cash form) therefrom and (ii)
the Fair Market Value of all securities issued to the Company or a Subsidiary of
the Company in connection therewith, in each case net of (A) all legal, title
and recording tax expenses, commissions and other fees and expenses incurred,
and all Federal, state, provincial, foreign and local taxes required to be paid
or accrued as a liability under GAAP as a consequence of such Asset Disposition,
(B) all payments made on any Indebtedness which is secured by any property or
assets subject to such Asset Disposition, in accordance with the terms of any
Lien upon such property or assets, or which must by its terms, or in order to
obtain a
-11-
<PAGE>
necessary consent to such Asset Disposition, or by applicable law, be repaid out
of the proceeds from such Asset Disposition, (C) all distributions and other
payments required to be made to minority interest Holders in Subsidiaries or
joint ventures as a result of such Asset Disposition and (D) the deduction of
appropriate amounts to be provided by the seller as a reserve, in accordance
with GAAP, against any liabilities associated with the property or assets
disposed of in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition; provided, that, in the event
--------
that any consideration for such Asset Disposition (which would otherwise
constitute Net Cash Proceeds) is required to be held in escrow pending
determination of whether a purchase price adjustment shall be made, such
consideration (or any portion thereof) shall become Net Cash Proceeds only at
such time as it is released to the Company or any Restricted Subsidiary from
escrow; provided, further, that any non-cash consideration received in
-------- -------
connection with such Asset Disposition, which is subsequently converted to cash,
shall be deemed to be Net Cash Proceeds at such time and shall thereafter be
applied in accordance with Section 4.7. The term "Net Cash Proceeds" from an
issuance or sale of Capital Stock means the cash proceeds of such issuance or
sale, net of attorneys' fees, accountants' fees, underwriters' or placement
agents' fees, discounts or commissions and brokerage, consultant and other fees
actually incurred in connection with such issuance or sale and net of taxes paid
or payable as a result thereof.
"Officer" means the Chairman of the Board and Chief Executive Officer,
-------
the President and Chief Operating Officer, the Vice President and Chief
Administrative Officer, any other Vice President, the Treasurer or the Secretary
of the Company.
"Officers' Certificate" means a certificate signed by two Officers at
---------------------
least one of whom shall be the principal executive officer, principal accounting
officer or principal financial officer of the Company.
"Opinion of Counsel" means a written opinion, in form acceptable to the
------------------
Trustee, from legal counsel who is acceptable to the Trustee. The counsel may
be an employee of or counsel to the Company or the Trustee.
"Ordinary Course of Business" means sales or assignments of inventory
---------------------------
or accounts receivable or the performance of services at Fair Market Value or
the collection of accounts receivable in the ordinary course of business and
does not include any sale, assignment or collection (i) after any Foreclosure
Event or (ii) after the voluntary or involuntary bankruptcy of the Company,
including, without limitation, those events of the type described in Section
6.1(9) and (10). The ordinary course of business shall include (i) sales of
inventory to customers, (ii) returns of merchandise to manufacturers or
distributors for refunds or credit and (iii) exchanges of inventory with
manufacturers or distributors for other inventory.
"Pari passu," as applied to the ranking of any Indebtedness of a Person
----------
in relation to other Indebtedness of such Person, means that each such
Indebtedness either (i) is not subordinate in right of payment to any
Indebtedness or (ii) is subordinate in right of
-12-
<PAGE>
payment to the same Indebtedness as is the other; and is so subordinate to the
same extent, and is not subordinate in right of payment to each other or to any
Indebtedness as to which the other is not so subordinate.
"Permitted Investment" means an Investment by the Company or any
--------------------
Restricted Subsidiary in (i) a Wholly Owned Subsidiary (including any Person
which will become a Wholly Owned Subsidiary as a result of such Investment) or
any Person that is merged or consolidated with or into, or transfers or conveys
all or substantially all of its business or assets to, the Company or any Wholly
Owned Subsidiary at the time such Investment is made; (ii) Temporary Cash
Investments; (iii) receivables owing to the Company or such Restricted
Subsidiary, if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms; provided,
--------
however, that nothing in this paragraph shall limit in any way the ability of
- -------
the Company or such Restricted Subsidiary to settle, compromise or otherwise
deal with such receivables in the ordinary course of business; (iv) payroll,
travel and similar advances to cover matters that are expected at the time of
such advances ultimately to be treated as expenses for accounting purposes and
that are made in the ordinary course of business; (v) loans or advances, in the
aggregate principal amount of $6,000,000 outstanding from time to time, to
employees of the Company or such Restricted Subsidiary made in the ordinary
course of business consistent with past practices of the Company or such
Restricted Subsidiary, as the case may be; (vi) stock, obligations or securities
received in settlement of debts created in the ordinary course of business and
owing to the Company or such Restricted Subsidiary or in satisfaction of
judgments; (vii) joint ventures, whether in the form of cash or through a
contribution of assets (the nature of which, if other than cash, to be
determined in good faith by the Board of Directors, whose determination shall be
evidenced by a Board Resolution delivered to the Trustee) in an amount not to
exceed $10,000,000 at any one time for any joint venture; provided, however,
-----------------
that the aggregate amount so invested in joint ventures shall not exceed the
amount permitted by Section 4.21; and (viii) any other property, asset or Person
if made pursuant to any written agreement of the Company or such Restricted
Subsidiary in effect on the Issue Date; and (ix) Investments made as a result of
the receipt of non-cash consideration from an Asset Disposition that was made
pursuant to and in compliance with the provisions of Section 4.7 or a
disposition of assets pursuant to and in compliance with the provisions of
Article 5 hereof.
"Permitted Liens" means (i) pledges or deposits by the Company or any
---------------
Restricted Subsidiary under workmen's compensation laws, unemployment insurance
laws, other types of social security benefits or similar legislation, or good
faith deposits in connection with bids, tenders or contracts (other than for the
payment of Indebtedness) or leases to which the Company or any Restricted
Subsidiary is a party, or deposits to secure public or statutory obligations or
deposits of cash or United States government bonds to secure surety or appeal
bonds to which the Company or any Restricted Subsidiary is a party, or deposits
as security for contested taxes or import duties or for the payment of rent, in
each case incurred by the Company or any Restricted Subsidiary in the ordinary
course of business consistent with past practice; (ii) Liens imposed by law,
such as carriers', warehousemen's and mechanics Liens, in each case for sums not
yet due from the Company
-13-
<PAGE>
or any Restricted Subsidiary or being contested in good faith by appropriate
proceedings by the Company or any Restricted Subsidiary, as the case may be, or
other Liens arising out of judgments or awards against the Company or any
Restricted Subsidiary with respect to which the Company or such Restricted
Subsidiary, as the case may be, shall then be prosecuting an appeal or other
proceedings for review; (iii) Liens for property taxes or other taxes,
assessments or governmental charges of the Company or any Restricted Subsidiary
not yet due or payable or subject to penalties for nonpayment or which are being
contested by the Company or such Restricted Subsidiary, as the case may be, in
good faith by appropriate proceedings; (iv) Liens in favor of issuers of standby
letters of credit, performance bonds and surety bonds; (v) survey exceptions,
encumbrances, easements or reservations of, or rights of others for, licenses,
rights-of-way, sewers, electric lines, telegraph and telephone lines and other
similar purposes or zoning or other restrictions as to the use of real property
of the Company or any Restricted Subsidiary incidental to the ordinary course of
conduct of the business of the Company or such Restricted Subsidiary or as to
the ownership of properties of the Company or any Restricted Subsidiary, which,
in either case, were not incurred in connection with Indebtedness and which do
not in the aggregate materially adversely affect the value of said properties or
materially impair their use in the operation of the business of the Company or
any Restricted Subsidiary; (vi) Liens to secure Indebtedness permitted under
Section 4.3(b)(i) and Section 4.4(b)(iv); (vii) Liens outstanding immediately
after the Issue Date as set forth on Schedule II hereto (and not otherwise
permitted by clause (vi)); (viii) Liens on property, assets or shares of stock
of any Restricted Subsidiary at the time such Restricted Subsidiary became a
Subsidiary of the Company; provided, however, that (A) if any such Lien shall
-------- -------
have been Incurred in anticipation of such transaction, such property, assets or
shares of stock subject to such Lien shall have a Fair Market Value at the date
of the acquisition thereof not in excess of the lesser of (1) the aggregate
purchase price paid or owed by the Company in connection with the acquisition of
such Restricted Subsidiary and (2) the Fair Market Value of all property and
assets of such Restricted Subsidiary and (B) any such Lien shall not extend to
any other property or assets owned by the Company or any Restricted Subsidiary;
(ix) Liens on property or assets at the time the Company or any Restricted
Subsidiary acquired such property or assets, including any acquisition by means
of a merger or consolidation with or into the Company or such Restricted
Subsidiary; provided, however, that (A) if any such Lien shall have been
-------- -------
incurred in anticipation of such transaction, such property or assets subject to
such Lien shall have a Fair Market Value at the date of the acquisition thereof
not in excess of the lesser of (1) the aggregate purchase price paid or owed by
the Company or such Restricted Subsidiary in connection with the acquisition
thereof and of any other property and assets acquired simultaneously therewith
and (2) the Fair Market Value of all such property and assets acquired by the
Company or such Restricted Subsidiary and (B) any such Lien shall not extend to
any other property or assets owned by the Company or any Restricted Subsidiary;
(x) Liens securing Indebtedness or other obligations of a Restricted Subsidiary
owing to the Company or a Wholly Owned Subsidiary; (xi) Liens to secure any
extension, renewal, refinancing, replacement or refunding (or successive
extensions, renewals, refinancings, replacements or refundings), in whole or in
part, of any Indebtedness secured by Liens referred to in any of clauses (vii),
(viii) and
(ix); provided, however, that any such Lien will be limited to all or part of
-------- -------
the same property or assets that secured the original Lien (plus
-14-
<PAGE>
improvements on such property) and the aggregate principal amount of
Indebtedness that is secured by such Lien will not be increased to an amount
greater than the sum of (A) the outstanding principal amount, or, if greater,
the committed amount, of the Indebtedness described under clauses (vii), (viii)
and (ix) at the time the original Lien became a Permitted Lien under the
Indenture and (B) an amount necessary to pay any premiums, fees and other
expenses Incurred by the Company in connection with such refinancing, refunding,
extension, renewal or replacement; and (xii) Liens on property or assets of the
Company or any Restricted Subsidiary securing Indebtedness (1) under Purchase
Money Indebtedness or Capital Lease Obligations permitted under, in the case of
the Company, Section 4.3(b) and, in the case of such Restricted Subsidiary,
Section 4.4(b); provided, that (A) the amount of Indebtedness Incurred in any
--------
specific case does not, at the time such Indebtedness is Incurred, exceed the
lesser of the cost or Fair Market Value of the property or asset acquired or
constructed in connection with such Purchase Money Indebtedness or Capital Lease
Obligation, (B) such Lien shall attach to such property or asset upon
acquisition of such property or asset, and (C) no property or asset of the
Company or any Restricted Subsidiary (other than the property or asset acquired
or contracted in connection with such Purchase Money Indebtedness or Capital
Lease Obligation) are subject to any Lien securing such Indebtedness.
"Permitted Line of Business" means (i) the line or lines of business in
--------------------------
which the Company or any of its Subsidiaries is engaged on the Issue Date and
(ii) a line or lines of business similar or related to the line or lines of
business described in the foregoing clause (i).
"Person" means any individual, corporation, limited liability company,
------
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Pledged Securities" has the meaning set forth in the Security and
------------------
Pledge Agreement.
"Preferred Stock," as applied to the Capital Stock of any corporation,
---------------
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Principal" of a Security means the principal of the Security plus the
---------
premium, if any, payable on the Security which is due or overdue or is to become
due at the relevant time.
"Proceeds" has the meaning set forth in the Security and Pledge
--------
Agreement.
-15-
<PAGE>
"Pro forma" means, with respect to any calculation made or required to
--- -----
be made pursuant to the terms hereof, a calculation in accordance with Article
11 of Regulation S-X promulgated under the Securities Act (to the extent
applicable), as interpreted in good faith by the Board of Directors after
consultation with the independent certified public accountants of the Company,
or otherwise a calculation made in good faith by the Board of Directors after
consultation with the independent certified public accountants of the Company,
as the case may be.
"Purchase Money Indebtedness" means, with respect to any Person, all
---------------------------
obligations of such Person (i) consisting of the deferred purchase price of any
property or assets, conditional sale obligations, obligations under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business) and other purchase money obligations, in each case
where the maturity of such obligation does not exceed the anticipated useful
life of the property or asset being financed, (ii) Incurred to finance the
acquisition or construction of any property or asset and (iii) Incurred to
finance the acquisition of 100% of the Capital Stock (other than directors'
qualifying shares) of any other Person.
"Redeemable Stock" means, with respect to any Person, any Capital Stock
----------------
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or otherwise (including, without limitation,
upon the happening of any event) (i) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise, (ii) is convertible into or
exchangeable for Indebtedness (other than Preferred Stock) or Disqualified Stock
or (iii) is redeemable at the option of the Holder thereof, in whole or in part.
"Refinancing Indebtedness" means Indebtedness that refunds, refinances,
------------------------
replaces, renews, repays or extends (collectively, "refinances," "refinancing"
and "refinanced" shall have a correlative meaning) any Indebtedness (including
Indebtedness of the Company that refinances Indebtedness of any Restricted
Subsidiary and Indebtedness of any Restricted Subsidiary that refinances
Indebtedness of another Restricted Subsidiary), including Indebtedness that
refinances Refinancing Indebtedness; provided, that (i) the Refinancing
--------
Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the
Indebtedness being refinanced, (ii) the Refinancing Indebtedness has an Average
Life at the time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being refinanced and (iii)
such Refinancing Indebtedness is Incurred in an aggregate principal amount (or
if issued with original issue discount, an aggregate issue price) that is equal
to or less than the sum of (A) the aggregate principal amount (or if issued with
original issue discount, the aggregate accreted value) then outstanding of the
Indebtedness being refinanced and (B) any premiums, fees and other expenses paid
by the Company or the Restricted Subsidiary, as the case may be, in connection
with such refinancing; provided, further, that Refinancing Indebtedness shall
-------- -------
not include (x) Indebtedness of a Subsidiary of the Company that refinances
Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted
Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; provided,
--------
further, that the covenants relating to the
- -------
-16-
<PAGE>
Refinancing Indebtedness are no more restrictive in the aggregate than those of
the Indebtedness being refinanced and, if the Indebtedness being refinanced is
subordinated to the Securities, the Refinancing Indebtedness is at least as
subordinated to the Securities as the Indebtedness being refinanced.
"Replacement Collateral" means, at any relevant date in connection with
----------------------
an Asset Disposition, property or assets used in, or Capital Stock of any Person
related to the Company's business, other than the Collateral.
"Restricted Subsidiary" means any Subsidiary of the Company other than
---------------------
an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property
--------------------------
now owned or hereafter acquired whereby pursuant to a direct or indirect
arrangement the Company or any Restricted Subsidiary of the Company transfers
such property to a Person and the Company or such Restricted Subsidiary leases
it from such Person.
"SEC" means the Securities and Exchange Commission.
---
"Securities" means the Securities issued under this Indenture.
----------
"Securities Act" means the Securities Act of 1933.
--------------
"Security and Pledge Agreement" means the Security and Pledge Agreement
-----------------------------
pursuant to which certain Collateral is pledged to secure the Company's
obligations under the Securities substantially in the form of Exhibit C, as the
same may from time to time be amended, supplemented or otherwise modified in
accordance with the terms thereof and hereof.
"Senior Subordinated Indenture" means the Indenture, dated as of
-----------------------------
_______________, 1996, between the Company and IBJ Schroder Bank & Trust
Company, as Trustee, as the same may be amended, supplemented or modified in
accordance with its terms.
"Senior Subordinated Notes" means the 13% Senior Subordinated Notes due
-------------------------
2002 of the Company issued pursuant to the Senior Subordinated Indenture,
including any Senior Subordinated Notes issued upon the transfer thereof or in
substitution therefor and any Senior Subordinated Notes issued in payment of
accrued interest, as the same may be amended, modified, supplemented or extended
from time to time (provided that the term "Senior Subordinated Notes" shall not
include any amendment, modification or extension thereof, or supplement thereto,
to the extent such amendment, modification, extension or supplement increases or
permits increase in the principal amount outstanding or to be outstanding
thereunder not permitted under the terms of Section 4.3 ("Non-Permitted
Increases"), and in the event any such Non-Permitted Increases are provided for
in any such amendment, supplement, modification or extension, the term "Senior
Subordinated Notes"
-17-
<PAGE>
shall thereafter mean the Senior Subordinated Notes as in effect prior thereto
without giving effect to such Non-Permitted Increases).
"Stated Maturity" means, with respect to any security, the date
---------------
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the Holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"Subordinated Indebtedness" means (i) the Senior Subordinated Notes and
-------------------------
(ii) any other unsecured Indebtedness of the Company (whether outstanding on the
Issue Date or thereafter Incurred) which, pursuant to the terms of the
instrument creating or evidencing the same or pursuant to the terms of any
written agreement, is subordinate in right of payment to the Securities and as
to which no principal is required to be repaid until after the Stated Maturity
of the Securities.
"Subsidiary" of any Person means any corporation, association,
----------
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i) such
Person, (ii) such Person and one or more Subsidiaries of such Person or (iii)
one or more Subsidiaries of such Person.
"Temporary Cash Investments" means any of the following: (i)
--------------------------
investments in U.S. Government Obligations maturing within 90 days of the date
of acquisition thereof, (ii) investments in time deposit accounts, certificates
of deposit and money market deposits maturing within 90 days of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States of America or any State thereof having capital,
surplus and undivided profits aggregating in excess of $500,000,000 (or the
Dollar Equivalent thereof) and whose long-term debt is rated "A" or higher
according to Moody's Investors Service, Inc. (or such equivalent rating by at
least one "nationally recognized statistical rating organization" (as defined in
Rule 436 under the Securities Act)), (iii) repurchase obligations with a term of
not more than 7 days for underlying securities of the types described in clause
(i) entered into with a bank meeting the qualifications described in clause (ii)
and (iv) investments in commercial paper, maturing not more than 90 days after
the date of acquisition, issued by a corporation (other than an Affiliate of the
Company) organized and in existence under the laws of the United States of
America with a rating at the time as of which any investment therein is made of
"P-1" (or higher) according to Moody's Investors Service, Inc. or "A-1" (or
higher) according to Standard and Poor's Corporation.
-18-
<PAGE>
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
---
77bbbb) as in effect on the date of this Indenture; provided, however, that in
-------- -------
the event the Trust Indenture Act of 1939 is amended after such date, "TIA"
means, to the extent required by any such amendment, the Trust Indenture Act of
1939, as so amended.
"Trade Payables" means, with respect to any Person, any accounts
--------------
payable or any indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person arising in the ordinary course of business
of such Person in connection with the acquisition of goods or services,
including under the Company's Amended and Restated Master Supply Agreement dated
as of October 8, 1993, among the Company, SKC Limited and SKC America, Inc., as
such Agreement is in effect on the Issue Date.
"Trustee" means the party named as such in this Indenture until a
-------
successor replaces it in accordance with the provisions of this Indenture and,
thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
-------------
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Uniform Commercial Code" means the Uniform Commercial Code as in
-----------------------
effect from time to time in, unless the context otherwise specifies, New York.
"Unrestricted Subsidiary" means (i) each Subsidiary of the Company that
-----------------------
the Company has designated, or is deemed to have designated, pursuant to the
provisions described under Section 4.14 as an Unrestricted Subsidiary and that
has not been redesignated a Restricted Subsidiary and (ii) any Subsidiary of an
Unrestricted Subsidiary.
"U.S. Government Obligations" means direct obligations (or certificates
---------------------------
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"U.S. Restricted Subsidiary" means any Restricted Subsidiary that is
--------------------------
not a Foreign Restricted Subsidiary.
"Voting Stock" of a corporation means ail classes of Capital Stock of
------------
such corporation then outstanding and normally entitled to vote in the election
of directors.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the Capital
-----------------------
Stock of which (other than directors' qualifying shares) is owned by the Company
or another Wholly Owned Subsidiary.
-19-
<PAGE>
SECTION 1.2. Other Definitions.
-----------------
DEFINED IN
TERM SECTION
---- -----------
<TABLE>
<S> <C>
"Affiliate Transaction".............. 4.8
"Asset Disposition Purchase Amount".. 4.7(f)
"Asset Disposition Purchase Date".... 4.7(g)
"Asset Disposition Purchase Notice".. 4.7(h)
"Asset Disposition Purchase Offer"... 4.7(f)
"Asset Disposition Purchase Price"... 4.7(f)
"Asset Disposition Trigger".......... 4.7(f)
"Bankruptcy Law"..................... 6.1
"Change of Control Offer"............ 4.9(a)
"Change of Control Purchase Date".... 4.9(a)
"Change of Control Purchase Notice".. 4.9(a)
"Change of Control Purchase Price"... 4.9(a)
"Custodian".......................... 6.1
"Defaulted Interest"................. 2.13
"Event of Default"................... 6.1
"Excess Proceeds".................... 4.7(d)
"Global Securities".................. 2.1
"Legal Holiday"...................... 12.7
"Notice of Default".................. 6.1
"Paying Agent"....................... 2.3
"Permitted Indebtedness"............. 4.3(b)
"Permitted Restricted Subsidiary
Indebtedness"...................... 4.4(b)
"Refinanced Indebtedness"............ 4.3(e)
"Registrar".......................... 2.3
"Release Notice"..................... 10.6
"Release Termination"................ 10.6
"Replacement Collateral Purchase".... 4.7(b)
"Restricted Payment"................. 4.5
"Substitute Collateral".............. 10.7
"Surviving Entity"................... 5
"Trust Monies"....................... 11.1
</TABLE>
SECTION 1.3. Incorporation by Reference of Trust Indenture Act. This
-------------------------------------------------
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
-20-
<PAGE>
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.4. Rules of Construction. Unless the context otherwise
---------------------
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP; and
(7) the principal amount of any Preferred Stock shall be the greater
of (i) the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect to
such Preferred Stock.
-21-
<PAGE>
ARTICLE 2
THE SECURITIES
--------------
SECTION 2.1. Form and Dating. The Securities and the Trustee's
---------------
certificate of authentication shall be substantially in the form of Exhibit A,
which is hereby incorporated in and expressly made a part of this Indenture.
The Securities may have notations, legends or endorsements required by law,
stock exchange rule, agreements to which the Company is subject, if any, or
usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company). The Company shall furnish any such legend not
contained in Exhibit A to the Trustee in writing. Each Security shall be dated
the date of its authentication. The terms of the Securities set forth in
Exhibit A are part of the terms of this Indenture.
The Securities shall be issued initially in the form of one or more
permanent global Securities in registered form, substantially in the form set
forth in Exhibit A (the "Global Securities"), deposited with, or on behalf of,
the Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. Each Global Security shall bear such legend as may be
required or reasonably requested by the Depositary.
SECTION 2.2. Execution and Authentication. Two Officers shall sign
----------------------------
the Securities for the Company by manual or facsimile signature. The Company's
seal shall be impressed, affixed, imprinted or reproduced on the Securities and
may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall, upon receipt of a written order of the Company
signed by two officers, authenticate and make available for delivery Global
Securities for original issue in an aggregate principal amount of up to
$___________, registered in the name of the Depositary or the nominee of the
Depositary, and shall deliver such Global Securities to the Depositary or
pursuant to the Depositary's instructions. Such order shall specify the amount
of the Global Securities to be authenticated. The aggregate principal amount of
Securities outstanding at any time may not exceed $___________ except as
provided in Section 2.9. The Securities shall be issued in fully registered
form, without coupons, in denominations of $1,000 or any integral multiple
thereof.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each
-22-
<PAGE>
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as
any Registrar, Paying Agent or agent for service of notices and demands.
SECTION 2.3. Registrar and Paying Agent. The Company shall maintain
--------------------------
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"), at least one of
each such office to be located in the City of New York. The Registrar shall
keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and
shall be entitled to appropriate compensation therefor pursuant to Section 7.7.
The Company or any of its domestically incorporated Wholly Owned Subsidiaries
may act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.
SECTION 2.4. Paying Agent To Hold Money in Trust. On or prior to
-----------------------------------
each due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Securities and
shall notify the Trustee of any default by the Company in making any such
payment. If the Company or a Subsidiary of the Company acts as Paying Agent, it
shall segregate the money held by it as Paying Agent and hold it as a separate
trust fund. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed by the Paying
Agent. Upon complying with this Section, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
SECTION 2.5. Securityholder Lists. The Trustee shall preserve in as
--------------------
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
-23-
<PAGE>
SECTION 2.6. Transfer and Exchange. The Securities shall be issued in
---------------------
registered form and shall be transferable only upon the surrender of a Security
for registration of transfer. When a Security is presented to the Registrar or
a co-registrar with a request to register a transfer, the Registrar shall
register the transfer as requested if the requirements of Section 8-401(1) of
the Uniform Commercial Code are met. When Securities are presented to the
Registrar or a co-registrar with a request to exchange them for an equal
principal amount of Securities of other denominations, the Registrar shall make
the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar's or co-registrar's
request. The Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with any transfer or
exchange pursuant to this Section.
Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, the Paying Agent, the Registrar or any co-
registrar may deem and treat the person in whose name a Security is registered
as the absolute owner of such Security for the purpose of receiving payment of
principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the Company,
the Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary. Furthermore, any Holder of a Global
Security shall, by acceptance of such Global Security, agree that transfers of
beneficial interests in such Global Security may be effected only through a
book-entry system maintained by the Depositary (or its agent), and that
ownership of a beneficial interest in the Global Security shall be required to
be reflected in a book entry.
All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be entitled to the
same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
SECTION 2.7. Book-Entry Provisions for Global Securities. (a) The
-------------------------------------------
Global Securities initially shall (i) be registered in the name of the
Depositary or the nominee of the Depositary and (ii) be delivered to the Trustee
as custodian for the Depositary.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under any
Global Security, and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute legal owner of such
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a beneficial owner of any Security.
-24-
<PAGE>
(b) Transfers of a Global Security shall be limited to transfers of
such Global Security in whole, but not in part, to the Depositary, its
successors or their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance with the applicable rules and
procedures of the Depositary and the provisions of Section 2.9.
(c) The registered holder of a Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
SECTION 2.8. Certificated Securities. If the Depositary is at any
-----------------------
time unwilling or unable to continue as a depositary for the Global Security and
a successor depositary is not appointed by the Company within 90 days, the
Company will issue certificated Securities in exchange for the Global
Securities. In connection with the execution and delivery of such certificated
Securities, the Trustee shall reflect on its books and records a decrease in the
principal amount of the relevant Global Security equal to the aggregate
principal amount of such certificated Securities and the Company shall execute
and the Trustee shall, upon receipt of a written order of the Company signed by
two officers, authenticate and deliver one or more certificated Securities in an
equal aggregate principal amount.
SECTION 2.9. Replacement Securities. If a mutilated Security is
----------------------
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee or the Company. If required by
the Trustee or the Company, such Holder shall furnish an indemnity bond
sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from
any loss which any of them may suffer if a Security is replaced. The Company
and the Trustee may charge the Holder for their expenses in replacing a
Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.10. Outstanding Securities. Securities outstanding at any
----------------------
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.9, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
-25-
<PAGE>
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal of, and premium, if any, and interest payable on, that date with
respect to the Securities (or portions thereof) to be redeemed or maturing, as
the case may be, then on and after that date such Securities (or portions
thereof) cease to be outstanding and interest on them ceases to accrue.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction or consent or any amendment,
modification or other change to the Indenture, Securities owned by the Company
or by an Affiliate of the Company shall be disregarded and treated as if they
were not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent
or any amendment, modification or other change to the Indenture, only Securities
which the Trustee actually knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith shall not be
disregarded if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to the Securities and that the pledgee is
not the Company or an Affiliate of the Company.
SECTION 2.11. Temporary Securities. Until definitive Securities are
--------------------
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form
of definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.
SECTION 2.12. Cancellation. The Company at any time may deliver
------------
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver such canceled Securities to the Company. The Company
may not issue new Securities to replace Securities it has redeemed, paid or
delivered to the Trustee for cancellation.
SECTION 2.13. Defaulted Interest. Any interest on any Security which
------------------
is payable, but is not punctually paid or duly provided for, on the dates and in
the manner provided in the Securities and this Indenture (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant record date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (i) or (ii) below:
-26-
<PAGE>
(i) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Security and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such special record date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the special record date therefor to
be given to each Holder, not less than 10 days prior to such special record
date. Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities are registered
at the close of business on such special record date.
(ii) The Company may make payment of any Defaulted Interest on the
Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section 2.13, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.14. Record Date. The Company may set a record date for
-----------
purposes of determining the identity of Securityholders entitled to vote or to
consent to any action by vote or consent authorized or permitted by Sections 6.4
and 6.5. Unless this Indenture provides otherwise, such record date shall be
the later of 30 days prior to the first solicitation of such consent or the date
of the most recent list of Securityholders furnished to the Trustee pursuant to
Section 2.5 prior to such solicitation.
SECTION 2.15. CUSIP Numbers. The Company in issuing the Securities
-------------
may use CUSIP numbers (if then generally in use), and, if so, the Trustee shall
use CUSIP numbers in notices of redemption as of convenience to Holders;
provided, that
- --------
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any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Securities or as contained in any
notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee of any change in the CUSIP number.
ARTICLE 3
REDEMPTION
----------
SECTION 3.1. Notices to Trustee. If the Company elects to redeem
------------------
Securities pursuant to paragraph 5 of the Securities or is required to redeem
Securities pursuant to paragraph 6 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.
If the Company is required to redeem Securities pursuant to paragraph 6
of the Securities, it may reduce the principal amount of Securities required to
be redeemed to the extent it is permitted a credit by the terms of the
Securities and it notifies the Trustee of the amount of the credit and the basis
for it. If the reduction is based on a credit for purchased, redeemed or
canceled Securities that the Company has not previously delivered to the Trustee
for cancellation, it shall deliver such Securities with the notice.
The Company shall give each notice to the Trustee provided for in this
Section at least 45 days (or such lesser time as is acceptable to the Trustee)
but not more than 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein. If fewer than all the
Securities are to be redeemed, the record date relating to such redemption shall
be selected by the Company and given to the Trustee, which record date shall be
not less than 15 days after the date of notice to the Trustee.
SECTION 3.2. Selection of Securities To Be Redeemed. If fewer than
--------------------------------------
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by lot or by a method that complies with applicable
legal and securities exchange requirements, if any, and that the Trustee
considers fair and appropriate and in accordance with methods generally used at
the time of selection by fiduciaries in similar circumstances; provided,
however, that Securities required to be redeemed pursuant to paragraph 6 of the
Securities shall be redeemed pro rata. The Trustee shall make the selection
from outstanding Securities not previously called for redemption. The Trustee
may select for redemption portions of the principal of Securities that have
denominations larger than $1,000. Securities and portions of them the Trustee
selects shall be in amounts of $1,000 or a whole multiple of $1,000. Provisions
of this Indenture that apply to Securities called for
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redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
SECTION 3.3. Notice of Redemption. At least 30 days but not more
--------------------
than 60 days before a date for redemption of Securities, the Company shall mail
a notice of redemption by first-class mail to each Holder of Securities to be
redeemed; provided, however, that, in the case of any mandatory redemption
-------- -------
pursuant to paragraph 6 of the Securities, notice of such redemption shall be
given at least five Business Days prior to the date fixed for redemption.
The notice shall identify the Securities to be redeemed (including
CUSIP number) and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to be
redeemed;
(6) that, unless the Company defaults in making such redemption
payment, interest on Securities (or portions thereof) called for redemption
ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the Securities
called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.4. Effect of Notice of Redemption. Once notice of
------------------------------
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date). Failure to
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give notice or any defect in the notice to any Holder shall not affect the
validity of the notice to any other Holder.
SECTION 3.5. Deposit of Redemption Price. On or prior to the
---------------------------
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest (subject to
the right of Holders of record on the relevant record date to receive interest
due on the related interest payment date) on all Securities to be redeemed on
that date other than Securities or portions of Securities called for redemption
which have been delivered by the Company to the Trustee for cancellation.
SECTION 3.6. Securities Redeemed in Part. Upon surrender of a
---------------------------
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 4
COVENANTS
---------
SECTION 4.1. Payment of Securities. The Company shall promptly pay
---------------------
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent (other than the Company or a Wholly Owned Subsidiary acting as Paying
Agent) holds in accordance with this Indenture money sufficient to pay all
principal and interest then due.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.2. SEC Reports. The Company shall file the annual report
-----------
and other documents, reports and information required by Section 13 or 15(d) of
the Exchange Act with the SEC and, upon such filing, the Company shall (i)
promptly furnish such reports, documents and information to the Trustee and (ii)
within 15 days after such filing with the SEC, furnish, or cause the Trustee to
furnish, such reports, documents and information to the Securityholders. The
Company shall use its best efforts to remain subject to the periodic reporting
requirements of Section 13 of the Exchange Act. In the event the Company is no
longer subject to the periodic reporting requirements of Section 13 or 15(d) of
the Exchange Act, the Company shall file with the SEC and furnish to the Trustee
and to the Securityholders the annual reports and other documents, reports and
information as if it were subject to such reporting requirements; provided,
--------
however, that the Company shall not be so obligated to file such reports,
- -------
documents and information with the SEC if the SEC does not permit or accept such
filings, in which event such reports, documents and
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information shall be provided to the Trustee and the Holders at the times the
Company would have been required to provide such reports, documents and
information had it continued to have been subject to such reporting
requirements. The Company also shall comply with the other provisions of TIA
(S) 314(a).
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.3. Limitation on Indebtedness. (a) The Company shall not,
--------------------------
directly or indirectly, Incur any Indebtedness unless (i) no Default or Event of
Default shall have occurred and be continuing at the time of such Incurrence or
would occur as a consequence of such Incurrence and (ii) such Indebtedness is
Permitted Indebtedness under Section 4.3(b).
(b) "Permitted Indebtedness" means:
(i) Indebtedness represented by the Securities;
(ii) Indebtedness to be outstanding immediately after the Issue Date
and listed on Schedule I to this Indenture;
(iii) Indebtedness owing to and held by any Wholly Owned Subsidiary;
provided, however, that any subsequent issuance or transfer of any Capital
-------- -------
Stock that results in any such Wholly Owned Subsidiary ceasing to be a
Wholly Owned Subsidiary or any subsequent transfer of any such Indebtedness
(except to the Company or another Wholly Owned Subsidiary) shall be deemed,
in each case, to constitute the incurrence of such Indebtedness by the
issuer thereof;
(iv) Indebtedness Incurred in connection with a prepayment of the
Securities pursuant to a Change of Control Offer; provided, however, that
-------- -------
the aggregate principal amount of such Indebtedness does not exceed 100% of
the aggregate principal amount of the Securities prepaid; provided,
--------
further, however, that such Indebtedness (A) has an Average Life equal to
------- -------
or greater than the remaining Average Life of the Securities and (B) does
not mature prior to the Stated Maturity of the Securities;
(v) Indebtedness represented by the Senior Subordinated Notes;
(vi) Indebtedness in respect of Guarantees by the Company of
Indebtedness of any Restricted Subsidiary permitted to be Incurred under
Section 4.4(b);
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<PAGE>
(vii) Subordinated Indebtedness Incurred in connection with one or more
acquisitions of assets or capital stock of a business or businesses in an
aggregate principal amount not to exceed $10,000,000 Incurred in any Fiscal
Year of the Company (or, for the period from the Issue Date until September
30, 1996, in an aggregate principal amount not to exceed $[insert
$10,000,000 pro rated for the remainder of the initial Fiscal Year]);
provided, however, that in the case of each such acquisition, the
-------- -------
Subordinated Indebtedness Incurred shall not represent more than 37.5% of
the aggregate purchase price payable upon consummation of such acquisition.
(viii) Refinancing Indebtedness Incurred in respect of Indebtedness
Incurred pursuant to clause (ii) (other than the Senior Subordinated
Notes), (iv) or (vii) above; and
(ix) in addition to any Indebtedness permitted by clauses (i) through
(viii) above, up to an aggregate of (A) during the period prior to the
first anniversary of the Issue Date, $20,000,000 in principal amount of
Indebtedness at any one time outstanding and (B) thereafter, $30,000,000 in
principal amount of Indebtedness at any one time outstanding.
(c) The Company shall not directly or indirectly Incur any Indebtedness
if the proceeds thereof are used, directly or indirectly, to repay, prepay,
redeem, defease, retire, refund or refinance any Subordinated Indebtedness.
(d) For purposes of determining the outstanding principal amount of any
particular Indebtedness Incurred pursuant to this Section or Section 4.4, (1)
Indebtedness permitted by this Section or Section 4.4 need not be permitted
solely by reference to one provision permitting such Indebtedness but may be
permitted in part by one such provision and in part by one or more other
provisions of this Section or Section 4.4 permitting such Indebtedness and (2)
in the event that Indebtedness or any portion thereof meets the criteria of more
than one of the types of Indebtedness described in this Section or Section 4.4,
the Company, in its sole discretion, shall classify such Indebtedness and only
be required to include the amount of such Indebtedness in one of such types.
(e) For purposes of determining whether the principal amount of any
Refinancing Indebtedness permitted by this Section or Section 4.4 does not, in
the event it is issued in a currency different from the currency in which the
Indebtedness being refunded or refinanced or paid at maturity ("Refinanced
Indebtedness") was issued, exceed the principal amount of the Refinanced
Indebtedness, the spot rate for the purchase of the currency of the Refinanced
Indebtedness with the currency of the Refinancing Indebtedness, as published in
The Wall Street Journal in the "Exchange Rates" column under the heading
- -----------------------
"Currency Trading" on the date two Business Days prior to such determination,
shall be used. If The Wall Street Journal does not publish such spot rate on
-----------------------
such date, then the spot rate for the purchase of the currency of the Refinanced
Indebtedness with the currency of the Refinancing Indebtedness, as quoted by
________________, or any successor thereto, in
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<PAGE>
New York City at approximately 11:00 a.m. (New York time) on the date two
Business Days prior to such determination, shall be used.
Except as provided in the preceding paragraph, for purposes of
determining the Dollar Equivalent of any Indebtedness denominated in a currency
other than U.S. dollars outstanding at any time as permitted by this Section or
Section 4.4, such Dollar Equivalent shall be the Dollar Equivalent of such
currency at the date such Indebtedness is issued; provided, however, that if
-------- -------
such Indebtedness constituted Refinancing Indebtedness, such conversion shall be
made based on the Dollar Equivalent of the Refinanced Indebtedness at the date
of the issuance of the Refinanced Indebtedness (or any preceding Refinanced
Indebtedness, as applicable).
SECTION 4.4. Limitation on Restricted Subsidiary Indebtedness and
----------------------------------------------------
Preferred Stock. (a) The Company shall not permit any Restricted Subsidiary
- ---------------
to, directly or indirectly, Incur any Indebtedness or issue any Preferred Stock
unless (i) no Default or Event of Default shall have occurred and be continuing
at the time of such Incurrence or would occur as a consequence of such
Incurrence and (ii) such Indebtedness or Preferred Stock is Permitted Restricted
Subsidiary Indebtedness under Section 4.4(b).
(b) "Permitted Restricted Subsidiary Indebtedness"
means:
(i) Indebtedness or Preferred Stock to be outstanding immediately after
the Issue Date and listed on Schedule I to this Indenture;
(ii) Indebtedness or Preferred Stock owing to and held by the Company
or any Wholly Owned Subsidiary; provided, however, that any subsequent
-------- -------
issuance or transfer of any Capital Stock that results in any such Wholly
Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any subsequent
transfer of any such Indebtedness (except to the Company or a Wholly Owned
Subsidiary) shall be deemed, in each case, to constitute the incurrence of
such Indebtedness by the issuer thereof;
(iii) Refinancing Indebtedness Incurred in respect of Indebtedness
Incurred pursuant to clause (i) above; and
(iv) in addition to any Indebtedness permitted by clauses (i) through
(iii) above, up to an aggregate of $10,000,000 in principal amount of
Indebtedness of Foreign Restricted Subsidiaries at any one time
outstanding.
SECTION 4.5. Limitation on Restricted Payments. The Company shall
---------------------------------
not, and shall not permit any Restricted Subsidiary, to, directly or indirectly,
(i) declare or pay any dividend on, or make any distribution on or in respect
of, its Capital Stock (including any payment in connection with any merger or
consolidation involving the Company), except dividends or distributions payable
solely in its Capital Stock (other than
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<PAGE>
Disqualified Stock) or in options, warrants or other rights to purchase such
Capital Stock and except dividends or distributions payable solely to the
Company or any Restricted Subsidiary, (ii) purchase, redeem, retire or otherwise
acquire for value any Capital Stock of the Company or any Restricted Subsidiary
held by Persons other than the Company or a Restricted Subsidiary, (iii)
purchase, repurchase, redeem, defease or otherwise acquire or retire for value
(including pursuant to mandatory repurchase covenants) any Subordinated
Indebtedness or (iv) make any Investment (other than a Permitted Investment) in
any Person (any such dividend, distribution, purchase, redemption, repurchase,
defeasance, other acquisition, retirement or Investment being herein referred to
as a "Restricted Payment").
SECTION 4.6. Limitation on Restrictions on Distributions from
------------------------------------------------
Restricted Subsidiaries. The Company shall not, and shall not permit any
- -----------------------
Restricted Subsidiary to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (i) pay dividends or make any other
distributions on or in respect of its Capital Stock to the Company or any
Restricted Subsidiary or pay any Indebtedness owed to the Company or any
Restricted Subsidiary, (ii) make loans or advances to the Company or (iii)
transfer any of its property or assets to the Company or any Restricted
Subsidiary, except for:
(a) any encumbrance or restriction pursuant to an agreement in effect
at or entered into on the Issue Date;
(b) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness Incurred
by such Restricted Subsidiary on or prior to the date on which such
Restricted Subsidiary became a Subsidiary of, or was acquired by, the
Company (other than Indebtedness Incurred as consideration in, or to
provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant to
which such Restricted Subsidiary became a Subsidiary of, or was acquired
by, the Company) and outstanding on such date;
(c) any encumbrance or restriction pursuant to an agreement relating to
an acquisition of property, so long as the encumbrances or restrictions in
such agreement relate solely to the property so acquired;
(d) any encumbrance or restriction pursuant to an agreement effecting
a refinancing of Indebtedness Incurred pursuant to an agreement referred to
in clause (a), (b) or (c) or contained in any amendment to any such
agreement or amendment; provided, however, that any encumbrance and any
-------- -------
restriction contained in any such refinancing agreement or amendment is no
less favorable to the Securityholders than any encumbrance or restriction
contained in such agreement; and
(e) in the case of clause (iii), any encumbrance or restriction (1)
that restricts in a customary manner the subletting, assignment or transfer
of any property or asset that is a lease, license, conveyance or contract
or similar property or asset, (2) arising
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by virtue of any transfer of, agreement to transfer, option or right with
respect to, or Lien on, any property or assets of the Company or any
Restricted Subsidiary not otherwise prohibited by this Indenture or (3)
arising or agreed to in the ordinary course of business and that does not,
individually or in the aggregate, detract from the value of property or
assets of the Company or any Restricted Subsidiary in any manner material
to the Company or such Restricted Subsidiary.
SECTION 4.7. Limitation on Sales of Assets and Restricted Subsidiary
-------------------------------------------------------
Stock. (a) The Company shall not, and shall not permit any Restricted
- -----
Subsidiary to, make any Asset Disposition unless (i) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Disposition at least equal to the Fair Market Value of the shares,
property and assets subject to such Asset Disposition, (ii) at least 75% of such
consideration (or, in the event of any Asset Disposition of all or any portion
of the Company's Magnetics Division or a Foreign Subsidiary, at least 50% of
such consideration) consists of cash or Temporary Cash Investments and (iii) in
connection with any Asset Disposition with an aggregate consideration greater
than $10,000,000, the Company delivers an Officers' Certificate to the Trustee
certifying that such Asset Disposition complies with clauses (i) and (ii) and
that such Asset Disposition was approved by a majority of the Board of Directors
including a majority of the disinterested members of the Board of Directors, as
evidenced by a Board Resolution delivered to the Trustee. Upon the closing of
any such Asset Disposition, the Company shall cause the Net Cash Proceeds from
such Asset Disposition to be delivered to the Trustee and pledged to the Trustee
for deposit in a collateral account in the name and under the sole dominion and
control of the Trustee and shall take such other actions, at the sole expense of
the Company, as shall be reasonably requested by the Trustee to create in favor
of the Trustee on behalf of the securityholders a perfected first priority Lien
in respect of such Net Cash Proceeds and all other property and assets received
in connection with such Asset Disposition and to insure that all such Collateral
shall be free and clear of all Liens other than Permitted Liens. Any proceeds
from an Asset Disposition, other than Net Cash Proceeds, shall be subject to the
Lien of this Indenture and the other Collateral Documents in accordance with the
provisions of this Indenture.
(b) Within 365 days after the receipt of any Net Cash Proceeds in
connection with any Asset Disposition, the Company or such Restricted
Subsidiary, as the case may be, may, subject to the procedures set forth in
Section 4.7(c), reinvest such Net Cash Proceeds in an amount not to exceed
$3,500,000 in any 365-day period in Replacement Collateral (other than
inventory) at a purchase price which does not exceed the Fair Market Value of
such Replacement Collateral so purchased (a "Replacement Collateral Purchase").
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<PAGE>
(c) If the Company or a Restricted Subsidiary reinvests any Net Cash
Proceeds pursuant to Section 4.7(b), the Company or such Restricted Subsidiary
shall deliver an Officers' Certificate to the Trustee certifying that such
Replacement Collateral Purchase complies with Section 4.7(b). The Company will
take such actions, at the sole expense of the Company, to create in favor of the
Trustee for the benefit of the Holders a perfected first priority Lien in
respect of any Replacement Collateral concurrently with the acquisition thereof.
Such Replacement Collateral will be free and clear of Liens other than Permitted
Liens.
(d) Upon receipt by the Trustee of the documents and instruments
described in Section 4.7(c) in a form reasonably satisfactory to the Trustee,
evidence of the taking of such actions reasonably satisfactory to the Trustee,
as may be necessary or desirable, to create in favor of the Trustee the Lien in
respect of the related Replacement Collateral required by Section 4.7(c) and the
Collateral Documents and compliance with the provisions of Section 10.6, the
Trustee shall, unless a Default or Event of Default shall have occurred at any
time and be continuing, simultaneously release from the Lien of the Indenture
and the other Collateral Documents, and deliver to the Company, the Net Cash
Proceeds that were delivered to the Trustee, together with the proceeds thereof,
in the amount requested by the Company or such Restricted Subsidiary; provided,
--------
that such amount shall not exceed the purchase price of the Replacement
Collateral. In the event any Replacement Collateral is Capital Stock of any
Person and such Person will be a Restricted Subsidiary, the Company shall cause
such Capital Stock to be pledged to the Trustee for the benefit of Holders of
the Securities; provided, that, in the event such Person shall be a Foreign
--------
Restricted Subsidiary, such pledge shall be limited to an amount equal to the
lesser of: (i) 65% of the total voting power of shares of all the outstanding
Capital Stock of such Person entitled to vote in the election of directors,
managers or trustees of such Person and (ii) the percentage of the shares of
such Capital Stock equal to the maximum percentage of such shares that can be
pledged to the Trustee without constituting an investment of earnings in United
States property under Section 956 (or any successor provision) of the Code that
would trigger an increase in the gross income of the Company or any of its
Subsidiaries pursuant to Section 951 (or any successor provision) of the Code.
In any event of any such pledge of the Capital Stock, all the assets and
property of the issuer of such Capital Stock shall be considered, if such issuer
shall be a U.S. Restricted Subsidiary, Replacement Collateral and the
requirements described in Section 4.7(c) relating to the pledge thereof to the
Trustee shall apply in full. Any Net Cash Proceeds received by the Company from
Asset Dispositions in excess of $3,500,000 during any 365-day period and any Net
Cash Proceeds up to $3,500,000 that are not used within 365 days of receipt
thereof and in accordance with the procedures referenced in the first sentence
of this paragraph will constitute "Excess Proceeds".
(e) To the extent that any or all of the Net Cash Proceeds of any
Foreign Asset Disposition received by a Restricted Subsidiary is prohibited or
delayed by applicable local law from being repatriated to the United States of
America, the portion of such Net Cash Proceeds so affected shall not be required
to be applied at the time provided above, but may be retained by the applicable
Restricted Subsidiary so long, but only so long, as the
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applicable local law will not permit repatriation to the United States of
America (the Company agreeing to, and to cause such Restricted Subsidiary to,
promptly take all actions required by the applicable local law to permit such
repatriation). Once such repatriation of any such affected Net Cash Proceeds is
permitted under the applicable local law, such repatriation shall be immediately
effected and such repatriated Net Cash Proceeds will be applicable in the manner
set forth in this Section.
(f) Each time that the aggregate amount of Excess Proceeds relating to
Asset Dispositions equals or exceeds $2,000,000, taking into account income
earned on such Excess Proceeds (the "Asset Disposition Trigger"), the Company
shall, at its option, either (i) apply (x) 50% of such Excess Proceeds to the
payment as and when due of one or more scheduled installments of principal of
the Securities in order of maturity and (y) 50% of such Excess Proceeds to the
redemption of Securities in accordance with paragraph 6 of the Securities or
(ii) make an offer to purchase (an "Asset Disposition Purchase Offer") an
aggregate principal amount of outstanding Securities equal to the aggregate
Excess Proceeds at such time (the "Asset Disposition Purchase Amount") for cash
at a purchase price (such price, the "Asset Disposition Purchase Price") equal
to 100% of the principal amount of the Securities so purchased plus any accrued
and unpaid interest thereon to the Asset Disposition Purchase Date (as defined
in Section 4.7(g)), in accordance with the procedures (including prorationing in
the event of over subscription) set forth in Section 4.7(g). Any such Excess
Proceeds which remain after the acquisition by the Company of Securities
tendered (and not withdrawn) by Securityholders pursuant to any such Asset
Disposition Purchase Offer in accordance with the procedures (including
proration in the event of oversubscription) set forth in Section 4.7(h) shall
cease to be Excess Proceeds and, notwithstanding the restrictions set forth in
Section 4.7(b), may be reinvested by the Company in Replacement Collateral.
(g) Within 30 days of the occurrence of an Asset Disposition Trigger,
(i) the Company shall notify the Trustee in writing of the occurrence of the
Asset Disposition Trigger and shall inform the Trustee as to whether the Company
elects to make the Asset Disposition Purchase Offer, (ii) if the Company elects
to make the Asset Disposition Purchase Offer, (x) the Company shall make such
Offer to purchase Securities in an aggregate principal amount equal to the Asset
Disposition Purchase Amount at the Asset Disposition Purchase Price on or before
the date specified in such notice, which date shall be no more than 60 Business
Days after the occurrence of the Asset Disposition Trigger (the "Asset
Disposition Purchase Date"), (y) the Trustee shall mail a copy of the Asset
Disposition Purchase Offer to each Securityholder and (z) the Company shall
cause a notice of the Asset Disposition Purchase Offer to be sent to the Dow
Jones News Service or similar business news service in the United States of
America. Any such Asset Disposition Purchase Offer shall remain open from the
time such offer is made until the Asset Disposition Purchase Date. The Company
shall purchase all Securities properly tendered pursuant to any such Asset
Disposition Purchase Offer and not withdrawn in accordance with the procedures
set forth in the Asset Disposition Purchase Notice (as defined below). The
Trustee shall be under no obligation to ascertain, and the Trustee shall not be
deemed to have knowledge of, the occurrence of an Asset Disposition Trigger or
to give notice with
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respect thereto other than as provided above upon receipt of an Asset
Disposition Purchase Offer from the Company. The Trustee may conclusively
assume, in the absence of receipt of notice from the Company, that no Asset
Disposition Trigger has occurred. Any such Asset Disposition Purchase Offer
shall include a form of Asset Disposition Purchase Notice to be completed by the
Securityholder and shall state or provide:
(1) the nature of the Asset Dispositions resulting in the Asset
Disposition Trigger, the date or dates such Asset Dispositions occurred and
the amount of the Net Cash Proceeds;
(2) that the Asset Disposition Purchase Offer is being made pursuant
to this Section 4.7(g) and that Securities in an aggregate principal amount
equal to the Asset Disposition Purchase Amount, selected in accordance with
this Indenture (if more than such amount shall be tendered) on a pro rata
--- ----
basis (with such adjustments as may be deemed appropriate by the Company so
that only Securities in denominations of $1,000, or integral multiples
thereof, shall be purchased) from among all the Securities properly
tendered pursuant to the Asset Disposition Purchase Offer, will be accepted
for payment;
(3) the date by which the Asset Disposition Purchase Notice pursuant
to this Section 4.7(g) must be given;
(4) the Asset Disposition Purchase Date;
(5) the Asset Disposition Purchase Price;
(6) the name and address of the Paying Agent;
(7) that Securities must be surrendered to the Paying Agent at the
office of the Paying Agent to collect payment;
(8) information concerning the business of the Company which the
Company in good faith believes will enable such Holders to make an informed
decision (which at a minimum shall include (i) the most recently filed
Annual Report on Form 10-K (including audited consolidated financial
statements) of the Company, the most recent subsequently filed Quarterly
Report on Form 10-Q and any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report, other than Current Reports describing
Asset Dispositions otherwise described in the offering materials (or
corresponding successor reports) and (ii) a description of material
developments in the Company's business subsequent to the date of the latest
of such Reports;
(9) that the Asset Disposition Purchase Price for any Security as to
which an Asset Disposition Purchase Notice has been duly given and not
withdrawn (subject to proration if Securities with an aggregate principal
amount greater than the Asset Disposition Purchase Amount are so tendered)
will be paid promptly upon the later to
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<PAGE>
occur of the first Business Day following the Asset Disposition Purchase
Date and the time of surrender of such Security as described in clause (7);
(10) the procedures the Holder must follow to accept the Asset
Disposition Purchase Offer; and
(11) the procedures for withdrawing an Asset Disposition Purchase
Notice.
(h) A Holder may accept an Asset Disposition Purchase Offer by
delivering to the Paying Agent at the office of the Paying Agent a written
notice (an "Asset Disposition Purchase Notice") at any time prior to the close
of business in the location of the office of the Paying Agent on the Asset Sale
Purchase Date, stating:
(1) that such Holder elects to have a Security purchased pursuant to
the Asset Disposition Purchase Offer;
(2) the principal amount of the Security that the Holder elects to
have purchased by the Company, which amount must be $1,000 or an integral
multiple thereof, and the certificate numbers of the Securities to be
delivered by such securityholder for purchase by the Company; and
(3) that such Security shall be purchased on the Asset Disposition
Purchase Date pursuant to the terms and conditions specified in this
Indenture.
The delivery of such Security (together with all necessary
endorsements, as determined by the Company) to the Paying Agent at the office of
the Paying Agent prior to, on or after the Asset Disposition Purchase Date shall
be a condition to the receipt by the Holder of the Asset Disposition Purchase
Price therefor; provided, that such Asset Disposition Purchase Price shall be so
--------
paid pursuant to this Section 4.7(h) only if the Security so delivered to the
Paying Agent shall conform in all respects to the description thereof set forth
in the related Asset Disposition Purchase Notice. If at the expiration of the
Asset Disposition Purchase Offer the aggregate principal amount of Securities
surrendered by Holders exceeds the Asset Disposition Purchase Amount, the
Company or the Trustee shall select the Securities to be purchased on a pro rata
basis (with such adjustments as may be deemed appropriate by the Company so that
only Securities in denominations of $1,000, or integral multiples thereof, shall
be purchased). Holders whose Securities are purchased only in part will be
issued new Securities equal in principal amount to the unpurchased portion of
the Securities surrendered.
The Company shall purchase from the Holder thereof, pursuant to an
Asset Disposition Purchase Offer made in accordance with this Section 4.7, a
portion of a Security if the principal amount of such portion is $1,000 or an
integral multiple of $1,000. Provisions of this Indenture that apply to the
purchase of all of a Security also apply to the purchase of a portion of such
Security.
-39-
<PAGE>
The Paying Agent shall promptly notify the Company of the receipt by it
of any Asset Disposition Purchase Notice or written notice of withdrawal
thereof.
Upon receipt by the Paying Agent of an Asset Disposition Purchase
Notice, the Holder of the Security in respect of which such Asset Disposition
Purchase Notice was given shall (unless such Asset Disposition Purchase Notice
is withdrawn as specified in the following paragraph) thereafter be entitled to
receive solely the Asset Disposition Purchase Price with respect to such
Security (subject to proration if Securities with an aggregate principal amount
greater than the Asset Disposition Purchase Amount are properly tendered). Such
Asset Disposition Purchase Price shall be paid to such Securityholder by the
Paying Agent promptly upon the later of (a) the first Business Day following the
Asset Disposition Purchase Date (provided the conditions in this Section 4.7(h)
have been satisfied) and (b) the first Business Day following the time of
delivery of the Security to the Paying Agent at the office of the Paying Agent
by the Holder thereof in the manner required by this Section 4.7(h).
An Asset Disposition Purchase Notice may be withdrawn before or after
delivery by the Holder to the Paying Agent at the office of the Paying Agent of
the Security to which such Asset Disposition Purchase Notice relates, by means
of a written notice of withdrawal delivered by the Holder to the Paying Agent at
the office of the Paying Agent to which the related Asset Disposition Purchase
Notice was delivered at any time prior to the close of business on the Asset
Disposition Purchase Date specifying, as applicable:
(1) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted;
(2) the principal amount of the Security (which shall be $1,000 or an
integral multiple thereof) with respect to which such notice of withdrawal
is being submitted; and
(3) the principal amount, if any, of such Security (which shall be
$1,000 or an integral multiple thereof) that remains subject to the
original Asset Disposition Purchase Notice and that has been or will be
delivered for purchase by the Company.
No later than the date upon which written notice of an Asset
Disposition Purchase Offer is delivered to the Trustee, the Company shall cause
to be irrevocably deposited with the Paying Agent, subject to the provisions of
Section 2.4, in cash or Temporary Cash Investments an amount sufficient to pay
the aggregate Asset Disposition Purchase Price, to be held for payment in
accordance with the provisions of this Section.
(i) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations
-40-
<PAGE>
and shall not be deemed to have breached its obligations under this Section by
virtue thereof.
SECTION 4.8. Limitation on Transactions with Affiliates. (a) The
------------------------------------------
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, conduct any business, enter into or permit to exist any
transaction (including, without limitation, the sale, conveyance, disposition,
purchase, exchange or lease of any property, the lending the borrowing or
advancing of any money or the rendering of any services) with, or for the
benefit of, any Affiliate of the Company (an "Affiliate Transaction") unless (i)
the terms of such Affiliate Transaction are set forth in writing, (ii) such
Affiliate Transaction is in the best interest of the Company or such Restricted
Subsidiary, as the case may be, (iii) such Affiliate Transaction is on terms as
favorable to the Company or such Restricted Subsidiary, as the case may be, as
those that could be obtained at the time of such Affiliate Transaction for a
similar transaction in arm's length dealings with a Person who is not such an
Affiliate and (iv) with respect to each Affiliate Transaction involving
aggregate payments or value in excess of $500,000, the Company delivers to the
Trustee an Officers' Certificate certifying that such Affiliate Transaction was
approved by a majority of the Board of Directors, including a majority of the
disinterested members of the Board of Directors, as evidenced by a Board
Resolution, and that such Affiliate Transaction complies with clauses (ii) and
(iii), such Board Resolution to be dated within 30 days of such Affiliate
Transaction.
(b) The provisions of Section 4.8(a) shall not prohibit (i) any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors, (ii) loans
or advances permitted under this Indenture to employees in the ordinary course
of business in accordance with past practices of the Company, (iii) the payment
of reasonable fees to directors of the Company and its Restricted Subsidiaries
who are not employees of the Company or of Restricted Subsidiaries, (iv) any
transaction between the Company and a Wholly Owned Subsidiary or between Wholly
Owned Subsidiaries or (v) reasonable and customary indemnification arrangements
between the Company or any Restricted Subsidiary and their respective directors
and officers pursuant to which the Company or any such Restricted Subsidiary
agrees to indemnify such directors and officers against losses and expenses
incurred by such directors and officers in connection with their service to the
Company or such Restricted Subsidiary, as the case may be (to the extent that
such indemnification arrangements are permitted under applicable law).
SECTION 4.9. Change of Control. (a) Upon a Change of Control, (i)
-----------------
the Company shall notify the Trustee, who shall in turn notify the Holders, in
writing of the occurrence of the Change of Control and shall make an offer to
purchase (the "Change of Control Offer") the Securities for cash at a purchase
price equal to 100% of the principal amount thereof plus any accrued and unpaid
interest thereon (collectively the "Change of Control Purchase Price") to the
Change of Control Purchase Date (as defined below) on or before the date
specified in such notice, which date shall be no earlier than 30 days and no
later than 60 Business Days after the occurrence of the Change of Control (the
"Change of Control Purchase Date"), (ii) the Company shall mail a copy of the
Change of Control Offer
-41-
<PAGE>
to each Holder and (iii) the Company shall cause a notice of the Change of
Control Offer to be sent at least once to the Dow Jones News Service and The
Bloomberg Business News Service or, if such news services no longer publish such
notices, a similar business news service in the United States. The Change of
Control Offer shall remain open from the time such offer is made until the
Change of Control Purchase Date. The Company shall purchase all Securities
properly tendered in the Change of Control Offer and not withdrawn in accordance
with the procedures set forth in Section 4.9(b). The Trustee shall be under no
obligation to ascertain, and the Trustee shall not be deemed to have knowledge
of, the occurrence of a Change of Control or to give notice with respect thereto
other than as provided above upon receipt of a Change of Control Offer from the
Company The Trustee may conclusively assume, in the absence of receipt of a
Change of Control Offer from the Company, that no Change of Control has
occurred. The Change of Control Offer shall include a form of change of control
purchase notice (the "Change of Control Purchase Notice") to be completed by the
Holder and shall state:
(1) the events causing a Change of Control and the date such Change of
Control is deemed to have occurred;
(2) the circumstances and relevant facts regarding such Change of
Control which the Company in good faith believes will enable Holders to
make an informed decision (which at a minimum will include (i) the most
recently filed Annual Report on Form 10-K (including audited financial
statements) of the Company, the most recent subsequently filed Quarterly
Report on Form 10-Q and any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report, (ii) a description of material
business developments in the Company's business subsequent to the date of
the latest of such Reports and (iii) information with respect to pro forma
--- -----
historical income, cash flow and capitalization, each after giving effect
to such Change of Control, events causing such Change of Control and the
date such Change of Control is deemed to have occurred);
(3) that the Change of Control Offer is being made pursuant to this
Section 4.9(a) and that all Securities properly tendered pursuant to the
Change of Control Offer will be accepted for payment;
(4) the date by which the Change of Control Purchase Notice pursuant
to this Section 4.9 must be given;
(5) the Change of Control Purchase Date;
(6) the Change of Control Purchase Price;
(7) the name and address of the Paying Agent;
(8) that Securities must be surrendered to the Paying Agent at the
office of the Paying Agent to collect payment;
-42-
<PAGE>
(9) that the Change of Control Purchase Price for any Security as to which a
Change of Control Purchase Notice has been duly given and not withdrawn
will be paid promptly upon the later of the first Business Day following
the Change of Control Purchase Date and the time of surrender of such
Security as described in clause (8);
(10) the procedure the Securityholder must follow to accept the Change
of Control Offer; and
(11) the procedures for withdrawing a Change of Control Purchase
Notice.
(b) A Securityholder may accept a Change of Control Offer by delivering
to the Paying Agent at the office of the Paying Agent a Change of Control
Purchase Notice at any time prior to the close of business in the location of
the office of the Paying Agent on the Change of Control Purchase Date, stating:
(1) that such Securityholder elects to have a Security purchased
pursuant to the Change of Control Offer;
(2) the principal amount of the Security that the Securityholder elects
to have purchased by the Company, which amount must be $1,000 or an
integral multiple thereof, and the certificate numbers of the Securities to
be delivered by such Securityholder for purchase by the Company; and
(3) that such Security shall be purchased on the Change of Control
Purchase Date pursuant to the terms and conditions specified in this
Indenture.
The delivery of such Security (together with all necessary
endorsements) to the Paying Agent at the office of the Paying Agent prior to, on
or after the Change of Control Purchase Date shall be a condition to the receipt
by the Securityholder of the Change of Control Purchase Price therefor;
provided, that such Change of Control Purchase Price shall be so paid pursuant
- --------
to this Section only if the Security so delivered to the Paying Agent shall
conform in all respects to the description thereof set forth in the related
Change of Control Purchase Notice. Securityholders whose Securities are
purchased only in part will be issued new Securities equal in principal amount
to be unpurchased portion of the Securities surrendered.
The Company shall purchase from the Holder thereof, pursuant to this
Section, a portion of a Security if the principal amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the Purchase of all of a Security also apply to the Purchase of a
portion of such Security.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Change of Control Purchase Notice or written notice of withdrawal
thereof.
-43-
<PAGE>
Upon receipt by the Company of the Change of Control Purchase Notice,
the Holder of the Security in respect of which such Change of Control Purchase
Notice was given shall (unless such Change of Control Purchase Notice is
withdrawn as specified in the following paragraph) thereafter be entitled to
receive solely the Change of Control Purchase Price with respect to such
Security. Such Change of Control Purchase Price shall be paid to such Holder
promptly upon the later of (a) the first Business Day following the Change of
Control Purchase Date (provided the conditions in this Section 4.9(b) have been
satisfied) and (b) the first Business Day following the time of delivery of the
Security to the Paying Agent at the office of the Paying Agent by the Holder
thereof in the manner required by this Section 4.9(b).
A Change of Control Purchase Notice may be withdrawn before or after
delivery by the Holder to the Paying Agent at the office of the Paying Agent of
the Security to which such Change of Control Purchase Notice relates, by means
of a written notice of withdrawal delivered by the Holder to the Paying Agent at
the office of the Paying Agent to which the related Change of Control Purchase
Notice was delivered at any time prior to the close of business on the Change of
Control Purchase Date specifying, as applicable:
(1) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted;
(2) the principal amount of the Security (which shall be $1,000 or an
integral multiple thereof) with respect to which such notice of withdrawal
is being submitted; and
(3) the principal amount, if any, of such Security (which shall be
$1,000 or an integral multiple thereof) that remains subject to the
original Change of Control Purchase Notice and that has been or will be
delivered for purchase by the Company.
No later than the date upon which the Change of Control Offer is
delivered to the Trustee, the Company shall irrevocably deposit with the Paying
Agent, subject to the provisions of Section 2.4, in cash or Temporary Cash
Investments an amount equal to the Change of Control Purchase Price to the
Holders entitled thereto, to be held for payment in accordance with the
provisions of this Section.
(c) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue thereof.
SECTION 4.10. Compliance Certificate. The Company shall deliver to
----------------------
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers'
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<PAGE>
Certificate stating that in the course of the performance by the signers of
their duties as Officers of the Company they would normally have knowledge of
any Default and whether or not the signers know of any Default that occurred
during such period. If they do, the certificate shall describe the Default, its
status and what action the Company is taking or proposes to take with respect
thereto. The Company also shall comply with TIA (S) 314(a)(4).
SECTION 4.11. Further Instruments and Acts. Upon request of the
----------------------------
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.12. Limitation on Liens and Impairment of Collateral. (a)
------------------------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create or permit to exist any Lien on any of its
property or assets (including Capital Stock), whether owned on the Issue Date or
thereafter acquired, or any right, title or interest thereto, other than
Permitted Liens.
(b) Except as permitted by this Indenture or any of the other
Collateral Documents, the Company shall not, and the Company shall not permit
any of its Subsidiaries to, directly or indirectly, (i) take or omit to take any
action which might or would have the result of adversely affecting or impairing
the perfected first priority Lien of the Indenture and the other Collateral
Documents with respect to the Collateral or any right, title or interest thereto
or (ii) grant to any Person any interest in, or right, title or interest to, the
Collateral, other than, in each case, Permitted Liens.
SECTION 4.13. Limitation on Issuance and Sale of Capital Stock of
---------------------------------------------------
Restricted Subsidiaries. The Company shall not permit (i) any Restricted
- -----------------------
Subsidiary to issue any Capital Stock other than to the Company or a Wholly
Owned Subsidiary; or (ii) any Person (other than the Company or a Wholly Owned
Subsidiary) to, directly or indirectly, own or control any Capital Stock of any
Restricted Subsidiary (other than directors' qualifying shares); provided,
--------
however, that clauses (i) and (ii) shall not prohibit (a) any sale of 100% of
- -------
the shares of the Capital Stock of any Restricted Subsidiary owned by the
Company or any Wholly Owned Subsidiary effected in accordance with Section 4.7,
(b) any Person from owning any of the Pledged Securities subsequent to any
foreclosure on or other transfer of such Pledged Securities in connection with
an exercise of remedies under any of the Collateral Documents or (c) any
issuance of Preferred Stock of a Restricted Subsidiary to any Person permitted
under Section 4.4.
SECTION 4.14. Restricted and Unrestricted Subsidiaries. The Board of
----------------------------------------
Directors may designate any Subsidiary of the Company or any Restricted
Subsidiary to be an Unrestricted Subsidiary if (i) the Subsidiary to be so
designated does not own any Capital Stock, Redeemable Stock or Indebtedness of,
or own or hold any Lien on any property or assets of, the Company or any other
Restricted Subsidiary, (ii) the Subsidiary to be so designated is not obligated
by any Indebtedness or Lien that, if in default, would result (with
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<PAGE>
the passage of time or notice or otherwise) in a default on any Indebtedness of
the Company or any Restricted Subsidiary, and (iii) either (A) the Subsidiary to
be so designated has total assets of $1,000 or less or (B) such designation is
effective immediately upon such Person becoming a Subsidiary of the Company or
of a Restricted Subsidiary. Unless so designated as an Unrestricted Subsidiary,
any Person that becomes a Subsidiary of the Company or any Restricted Subsidiary
shall be classified as a Restricted Subsidiary. Except as provided in the first
sentence of this paragraph (a), no Restricted Subsidiary shall be redesignated
as an Unrestricted Subsidiary. An Unrestricted Subsidiary shall not be
redesignated as a Restricted Subsidiary. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complies with the
foregoing provisions.
SECTION 4.15. After-Acquired Property. The Company shall, and shall
-----------------------
cause each Restricted Subsidiary to, cause all property (real and personal,
including, without limitation, Pledged Securities) and assets that are acquired
by the Company or such Restricted Subsidiary after the Issue Date to be subject
to the Lien of the Indenture and the other Collateral Documents, in the case of
such property that is not Substitute Collateral, within 60 days after the date
of acquisition thereof.
SECTION 4.16. Revisions to Schedules. (a) Schedule III shall be
----------------------
revised from time to time by the Company to accurately reflect all the U.S.
Restricted Subsidiaries, whether now existing or hereafter created, formed,
designated or acquired, and upon such revision a new Schedule III shall be
delivered to the Trustee.
(b) Schedule IV and Schedule V shall be revised from time to time by
the Company to reflect all governmental, regulatory and other offices where
filings, recordings, registrations and other actions necessary or advisable to
publish notice of the, to perfect, preserve and protect the validity of the, and
to establish a valid and perfected, Lien in favor of the Trustee in respect of
all Collateral, and upon such revision a new Schedule IV or Schedule V, as the
case may be, shall be delivered to the Trustee.
SECTION 4.17. Maintenance of Properties; Insurance. The Company
------------------------------------
shall, and shall cause each Restricted Subsidiary to, at all times maintain or
cause to be maintained insurance in accordance with the provisions of the
Collateral Documents and to maintain or cause to be maintained its properties
and assets in accordance with the provisions of the Collateral Documents and to:
(a) keep all property necessary in its business, including,
without limitation, the Collateral, in good working order and condition
(ordinary wear and tear excepted), in compliance with applicable
regulations, laws or restrictions and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company
may be necessary so its business may be properly and advantageously
conducted at all times; and
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<PAGE>
(b) maintain with recognized national or international insurance
companies, or through self-insurance programs, insurance on such of its
property and assets, including, without limitation, the Collateral, and
against such liabilities in at least such amounts, against at least such
risks and with such deductibles or self-insured retentions as in each case
are customarily insured against in the same general area by companies
engaged in the same or a similar business and consistent with the past
practices of the Company, and furnish to the Trustee an Officers'
Certificate specifying the nature of the insurance carried and adequacy
thereof at such times as it shall deliver to the Trustee an Officers'
Certificate pursuant to Section 4.10.
SECTION 4.18. Corporate Existence. Subject to Article 5, the Company
-------------------
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and the corporate, partnership or other
existence of each of its Subsidiaries, in accordance with the respective
organizational documents of the Company and each such Subsidiary and the rights
(charter and statutory), registrations, licenses and franchises of the Company
and such Subsidiaries; provided, however, that the Company shall not be required
-------- -------
to preserve any such right, license, registration or franchise, or the
corporate, partnership or other existence of any such Subsidiary, if the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries taken as a whole, and the loss thereof is not
adverse in any material respect to the Holders; provided, further, however, that
-------- ------- -------
if such Subsidiary has more than a de minimis amount of assets, the Board of
-- -------
Directors shall be required to make a determination to the foregoing effect.
SECTION 4.19. Taxes. The Company shall, and shall cause each of its
-----
Subsidiaries to, pay, prior to delinquency, all taxes, assessments and
governmental levies, except as the same are being contested in good faith and by
appropriate proceedings or where the failure to pay would not have a material
adverse effect on the Company and its Subsidiaries taken as a whole.
SECTION 4.20. Conflicting Agreements. The Company shall not, and
----------------------
shall not permit any of its Subsidiaries to, enter into any agreement or
instrument that by its terms expressly (i) prohibits the Company from making any
payments on the Securities required by the terms hereof and thereof or (ii)
except in respect of a Permitted Lien, requires that the proceeds received from
the sale of any Collateral be applied to repay, redeem or otherwise retire any
Debt of any person other than the Debt represented by the Securities, except as
set forth in the Collateral Documents.
SECTION 4.21. Capital Expenditures. The total amount of capital
--------------------
expenditures made by the Company for plant, property and equipment and
acquisitions of assets or capital stock of a business or businesses (excluding
reinvestments in Replacement Collateral pursuant to Section 4.7(b)) and
Investments in joint ventures shall not exceed in any Fiscal Year of the Company
the sum of (i) $15,000,000, (ii) an amount equal to the amount of Subordinated
Indebtedness incurred during such Fiscal Year in connection with
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<PAGE>
acquisitions of assets or capital stock of a business or businesses pursuant to
Section 4.3(b)(vii) and (iii) an amount equal to the amount of Capital Stock
(other than Disqualified Stock) of the Company issued during such Fiscal Year in
connection with acquisitions of assets or capital stock of a business or
businesses.
If the aggregate capital expenditures made by the Company in any Fiscal
Year is less than the amount permitted in this Section 4.21, the difference
between such amount permitted and the capital expenditures actually made may be
carried forward into the next Fiscal Year.
SECTION 4.22. Interest Coverage Ratio. The Company shall not permit
-----------------------
the Consolidated Coverage Ratio, for any twelve-month period ending on the last
day of each fiscal quarter set forth below, to be less than the ratio set forth
below opposite such period:
Twelve-Month Period Ending on Last
Day of Fiscal Quarter Ending Minimum Ratio
- ---------------------------------- -------------
<TABLE>
<CAPTION>
<S> <C>
September 30, 1996.................................. 1.500:1
December 31, 1996................................... 1.525:1
March 31, 1997...................................... 1.550:1
June 30, 1997....................................... 1.575:1
September 30, 1997.................................. 1.600:1
December 31, 1997................................... 1.625:1
March 31, 1998...................................... 1.650:1
June 30, 1998....................................... 1.675:1
September 30, 1998.................................. 1.700:1
December 31, 1998................................... 1.725:1
March 31, 1999...................................... 1.750:1
June 30, 1999....................................... 1.775:1
September 30, 1999.................................. 1.800:1
</TABLE>
ARTICLE 5
SUCCESSOR COMPANY
-----------------
The Company shall not, and the Company shall not permit any Restricted
Subsidiary to, enter into any transaction or series of transactions to
consolidate, amalgamate or merge with or into any other Person (other than the
merger of a Wholly Owned Subsidiary (i) with another Wholly Owned Subsidiary or
(ii) into the Company), or directly or indirectly through its Subsidiaries sell,
convey, assign, transfer, lease or otherwise dispose of all or substantially all
its property and assets to any Person (other than to one or more Wholly Owned
Subsidiaries or to the Company) unless (i) if the Company is a party to such
transaction and is not the surviving entity (the "Surviving Entity"), the Person
formed by such consolidation or amalgamation or into which the Company is merged
or that acquires,
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<PAGE>
by sale, conveyance, assignment, transfer, lease or other disposition, all or
substantially all the properties and assets of the Company as an entirety, shall
be a corporation organized and validly existing under the laws of the United
States or any State thereof or the District or Columbia and shall expressly
assume (a) by a supplemental indenture executed and delivered to the Trustee, in
form satisfactory to the Trustee, all the obligations of the Company pursuant to
the Securities and the Indenture and (b) by written instruments executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Company pursuant to the other Collateral Documents; (ii) the
Surviving Entity, if any Restricted Subsidiary is a party to such transaction
and is not the Surviving Entity, shall by written instruments executed and
delivered to the Trustee, in form satisfactory to the Trustee, expressly assume
all the obligations of such Restricted Subsidiary pursuant to the Collateral
Documents; (iii) immediately before and after giving effect to such transaction
or series of transactions on a pro forma basis (and treating any Indebtedness
--- -----
which becomes an obligation of the Company, the Surviving Entity or any
Restricted Subsidiary as a result of such transaction or series of transactions
as having been incurred by the Company, such Surviving Entity or such Restricted
Subsidiary at the time of such transaction or series of transactions) no Default
or Event of Default shall have occurred and be continuing; (iv) immediately
after giving effect to such transaction or series of transactions on a pro forma
--- -----
basis (and treating any Indebtedness which becomes an obligation of the Company,
the Surviving Entity or any Restricted Subsidiary as a result of such
transaction or series of transactions as having been incurred by the Company,
such Surviving Entity or such Restricted Subsidiary at the time of such
transaction or series of transactions), the Company or the Surviving Entity, as
the case may be, shall have a Consolidated Tangible Net Worth which is not less
than the Consolidated Tangible Net Worth of the Company immediately prior to
such transaction or transactions; and (v) the Company shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each stating (A)
that such consolidation, amalgamation, merger or transfer and such supplemental
indenture (if any) and written instrument (if any) comply with this Indenture,
(B) that upon execution and delivery of such supplemental indenture or written
instrument the Company or such Surviving Entity shall be bound by the terms of
this Indenture as thereby amended and this Indenture as thereby amended shall be
enforceable against the Company or such Successor Entity in accordance with its
terms, and (C) that the perfected first priority Lien of the Trustee for the
benefit of the Securityholders with respect to the Collateral continues in all
respects.
Upon any transaction involving the Company in which the Company is not
the Surviving Entity, such Surviving Entity shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture, but the Company in the case of a transfer or lease shall not be
released from the obligation to pay the principal of, and premium, if any, or
interest on, the Securities.
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ARTICLE 6
DEFAULTS AND REMEDIES
---------------------
SECTION 6.1. Events of Default. An "Event of Default" occurs if:
-----------------
(1) the Company fails to make any payment of interest on any Security
when the same shall become due and payable, and such failure continues for
a period of 30 days;
(2) the Company (i) fails to make the payment of the principal of or
premium, if any, on any Security when the same becomes due and payable at
its Stated Maturity, upon acceleration, redemption or declaration, or
otherwise or (ii) fails to redeem or purchase Securities when and to the
extent required pursuant to this Indenture or the Securities;
(3) the Company fails to comply with Article 5;
(4) the Company fails to comply with Section 4.2, 4.3, 4.4, 4.5, 4.6,
4.7, 4.8, 4.9, 4.12, 4.13, 4.20, 4.21 or 4.22 (other than a failure to
purchase Securities when required under Section 4.7 or 4.9) and such
failure continues for 30 days after the notice specified below, or the
Company fails to give the notice specified below;
(5) the Company fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in (1), (2), (3)
or (4) above) and such failure continues for a period of 60 days after the
notice specified below or the Company fails to give the notice specified
below;
(6) Principal of or interest on any Indebtedness of the Company or any
Restricted Subsidiary for borrowed money is not paid when due within any
applicable grace period or any Indebtedness of the Company or any
Restricted Subsidiary is accelerated by the holders thereof, in each case,
if the total amount so unpaid when due within any applicable grace period
or accelerated exceeds $5,000,000 or its Dollar Equivalent at the time;
(7) (A) the Company fails to comply with any of its representations,
warranties, covenants or agreements contained or incorporated by reference
in any Collateral Document (other than the Indenture) and such failure
continues beyond the applicable grace period provided in such Collateral
Document;
(B) on or after the Issue Date, other than in accordance with the
provisions of the Indenture, for any reason, other than the satisfaction in
full and discharge of all obligations secured thereby, any Collateral
Document ceases to be or is not in full force and effect or any Lien with
respect to Collateral with a Fair
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Market Value that exceeds $500,000 in the aggregate intended to be created
by any Collateral Document ceases to be or is not a valid and perfected
first priority Lien for more than 5 days;
(C) the occurrence of any event of default under any Collateral
Document; or
(D) on or after the Issue Date, other than in accordance with the
provisions of the Indenture, the Company asserts in writing that any
Collateral Document has ceased to be or is not in full force and effect;
(8) one or more judgments or decrees aggregating in excess of
$5,000,000 or its Dollar Equivalent at the time is rendered against the
Company or any Restricted Subsidiary and is not discharged and either: (A)
an enforcement proceeding has been commenced by any creditor upon such
judgment or decree; or (B) there is a period of 60 days following the entry
of such judgment or decree during which such judgment or decree is not
discharged, waived or the execution thereof stayed;
(9) the Company or any Restricted Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency; or
(10) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Restricted
Subsidiary or for any substantial part of its property; or
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(C) orders the winding up or liquidation of the Company or any
Restricted Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4) or (5) above is not an Event of Default
until the Trustee or the Holders of at least 25% in principal amount of the
Securities notify the Company of the Default and the Company does not cure such
Default within the time specified after receipt of such notice. Such notice
must specify the Default, demand that it be remedied and state that such notice
is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which with the giving of notice and the lapse of time would become an
Event of Default under clause (4), (5), (6) or (8) above, its status and what
action the Company is taking or proposes to take with respect thereto.
SECTION 6.2. Acceleration. If an Event of Default (other than an
------------
Event of Default specified in Section 6.1(9) or (10) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the Securities by notice to the
Trustee (who shall promptly notify the Company), may declare the principal of
and accrued interest on all the Securities to be due and payable. Upon such a
declaration, such principal and interest shall be due and payable immediately.
If an Event of Default specified in Section 6.1(9) or (10) occurs, the principal
of and interest on all the Securities shall ipso facto become and be immediately
---- -----
due and payable without any declaration or other act on the part of the Trustee
or any Securityholders. The Holders of a majority in principal amount of the
Securities by notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
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SECTION 6.3. Other Remedies. If an Event of Default occurs and is
--------------
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.4. Waiver of Past Defaults. The Holders of a majority in
-----------------------
principal amount of the Securities by notice to the Trustee may waive an
existing Default or Event of Default and its consequences except (i) a Default
or Event of Default in the payment of the principal (other than principal due by
reason of acceleration) of or interest on a Security or (ii) a Default or Event
of Default in respect of a provision that under Section 9.2 cannot be amended or
waived without the consent of each Securityholder affected. When a Default or
Event of Default is waived, it is deemed cured, but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any consequent
right.
SECTION 6.5. Control by Majority. The Holders of a majority in
-------------------
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or by
exercising any trust or power conferred on the Trustee. However, the Trustee
may refuse to follow any direction that conflicts with law, this Indenture or
the other Collateral Documents or, subject to Section 7.1, that the Trustee
determines is unduly prejudicial to the rights of other Securityholders or would
involve the Trustee in personal liability; provided, however, that the Trustee
-------- -------
may take any other action deemed proper by the Trustee that is not inconsistent
with such direction. Prior to taking any action hereunder, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
SECTION 6.6. Limitation on Suits. A Securityholder may not pursue
-------------------
any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that
an Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the
Securities make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
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(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the
Securities do not give the Trustee a direction inconsistent with the
request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.7. Rights of Holders To Receive Payment. Notwithstanding
------------------------------------
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Securities held by such Holder, on
or after the respective due dates expressed in the Securities, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
SECTION 6.8. Collection Suit by Trustee. If an Event of Default in
--------------------------
payment of interest or principal specified in Section 6.1(1) or (2) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount of principal and
interest remaining unpaid (together with interest on such unpaid interest to the
extent lawful) and the amounts provided for in Section 7.7.
SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may file
--------------------------------
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.7.
SECTION 6.10. Priorities. If the Trustee collects any money or
----------
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Securities
for interest;
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THIRD: to the Securityholders for amounts due and unpaid on
the Securities for principal, ratably, without preference or priority
of any kind, according to the amounts due and payable on the
Securities for principal; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
---------------------
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.7 or a suit by
Holders of more than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
--------------------------------
extent it may lawfully refrain from doing so) shall not at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and shall not hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
SECTION 6.13. Suits To Protect the Collateral. The Trustee shall
-------------------------------
have power to institute and to maintain such proceedings as it may deem
expedient to prevent any impairment of the Collateral by any acts which may be
unlawful or in violation of this Indenture or the other Collateral Documents and
to protect its interests and the interests of the Securityholders in the
Collateral, including power to institute and maintain proceedings to restrain
the enforcement of or compliance with any governmental enactment, rule or order
that may be unconstitutional or otherwise invalid, if the enforcement of or
compliance with such enactment, rule or order would impair the Lien of this
Indenture and the other Collateral Documents or be prejudicial to the interests
of the Holders or the Trustee. The Trustee shall also have the authority to
exercise any rights or powers conferred on the Trustee under this Indenture and
under each other Collateral Document.
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ARTICLE 7
TRUSTEE
-------
SECTION 7.1. Duties of Trustee. (a) If an Event of Default has
-----------------
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, in the
case of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall examine
the certificates and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the accuracy
of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that: (1) this paragraph does not limit the effect of paragraph (b) of
this Section; (2) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and (3) the Trustee shall not be
liable with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not
be segregated from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable
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grounds to believe that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.2. Rights of Trustee. (a) The Trustee may rely on any
-----------------
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
-------- -------
misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee shall not be
--------------------
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in the Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.5. Notice of Defaults. If a Default occurs and is
------------------
continuing and if it is known to a Trust Officer of the Trustee, the Trustee
shall mail to each Securityholder notice of the Default within 90 days after it
occurs. Except in the case of a
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Default in payment of principal of or interest on any Security (including
payments pursuant to the mandatory redemption provisions of such Security, if
any), the Trustee may withhold the notice if and so long as a committee of its
Trust Officers in good faith determines that withholding the notice is in the
interests of Securityholders.
SECTION 7.6. Reports by Trustee to Holders. If required by TIA (S)
-----------------------------
313(a), as promptly as practicable after each May 15 beginning with the May 15
following the date of this Indenture, and in any event prior to July 15 in each
year, the Trustee shall mail to each Securityholder a brief report dated as of
May 15 that complies with TIA (S) 313(a). The Trustee also shall comply with TIA
(S) 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.7. Compensation and Indemnity. The Company shall pay to
--------------------------
the Trustee from time to time such compensation as shall be agreed to in writing
between the Company and the Trustee for its services. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, sale or otherwise in connection with this Indenture and the other
Collateral Documents, in addition to the compensation for its services. Such
expenses shall include the reasonable compensation and expenses, disbursements
and advances of the Trustee's agents, counsel, accountants and experts and court
costs. The Company shall indemnify the Trustee against any and all loss,
liability damage, claim or expense (including reasonable attorneys' fees and
expenses), including taxes (other than taxes based on the income of the Trustee)
incurred by it in connection with the acceptance or administration of this trust
and the performance of its duties hereunder. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee may
have separate counsel and the Company shall pay the fees and expenses of such
counsel. The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on Securities under Article 8 or otherwise.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.1(9) or (10) with respect to
the Company, the expenses are intended to constitute expenses of administration
under Bankruptcy Law.
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SECTION 7.8. Replacement of Trustee. The Trustee may resign at any
----------------------
time by so notifying the Company. The Holders of a majority in principal amount
of the Securities may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.7.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
25% in principal amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
SECTION 7.9. Successor Trustee by Merger. If the Trustee
---------------------------
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting,
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surviving or transferee corporation or banking association without any further
act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
-----------------------------
all times satisfy the requirements of TIA (S) 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. No obligor upon the Securities or
Person directly controlling, controlled by or under common control with such
obligor shall serve as Trustee upon the Securities. The Trustee shall comply
with TIA (S) 310(b); provided, however, that there shall be excluded from the
-------- -------
operation of TIA (S) 310(b) (1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA (S) 310(b) (1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
-------------------------------------------------
Trustee shall comply with TIA (S) 311(a), excluding any creditor relationship
listed in TIA (S) 311(b). A Trustee who has resigned or been removed shall be
subject to TIA (S) 311(a) to the extent indicated.
SECTION 7.12. Appointment of Co-Trustee or Separate Trustee. (a)
---------------------------------------------
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Collateral may at the time be located, the Company and the Trustee acting
jointly shall have the power and shall execute and deliver all instruments to
appoint one or more persons approved by the Trustee to act as co-trustee or co-
trustee, jointly with the Trustee, of all or any part of the Collateral, or
separate trustee or separate trustees of any part of the Collateral, and to vest
in such person or persons, in such capacity and for the benefit of the Holders,
such title to the Collateral, or any part thereof, and, subject to the other
provisions of this Section 7.12, such powers, duties, obligations, rights and
trusts as the Company and the Trustee may consider necessary or desirable
hereunder or under any other Collateral Document. If the Company shall not have
joined in such appointment within 15 days after the receipt by it of a request
to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment.
The Company hereby appoints the Trustee as its agent and attorney to act for it
under the foregoing provisions of this Section in either of such contingencies.
No co-trustee or separate trustee hereunder shall
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be required to meet the terms of eligibility under Section 7.10 and no notice to
Holders of the appointment of any cotrustee or separate trustee shall be
required under Section 7.8.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee hereunder or under any Collateral Document shall be
conferred or imposed upon and exercised or performed by the Trustee and
such separate trustee or co-trustee jointly (it being understood that such
separate trustee or cotrustee is not authorized to act separately without
the Trustee joining in such act), except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or under any Collateral Document) the Trustee
shall be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the holding of
title to the Collateral or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate trustee or co-
trustee, but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Company and the Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture and, to the extent
applicable, the Collateral Documents. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Indenture and, to the extent applicable, the Collateral Documents,
specifically including every provision hereof and thereof relating to the
conduct of, affecting the liability of, or affording protection to, the Trustee.
Every such instrument shall be filed with the Trustee and a copy thereof given
to the Company.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Indenture and, to the extent applicable, the Collateral Documents, on its behalf
and in its name. If any separate trustee or co-trustee shall become incapable
of acting, resign or be removed, all its estates, properties, rights, remedies
and trusts shall vest in and be exercised by the Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
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<PAGE>
ARTICLE 8
DISCHARGE OF INDENTURE
----------------------
SECTION 8.1. Discharge of Liability on Securities. (a) When (i)
------------------------------------
the Company delivers to the Trustee all outstanding Securities (other than
Securities replaced pursuant to Section 2.9) for cancellation or (ii) all
outstanding Securities have become due and payable, whether at maturity or as a
result of the mailing of a notice of redemption pursuant to Article 3 hereof,
and the Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Securities, including interest
thereon (other than Securities replaced pursuant to Section 2.9), and if in
either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Sections 8.1(b) and 8.5, cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of
this Indenture on demand of the Company accompanied by an Officers' Certificate
and an Opinion of Counsel and at the cost and expense of the Company.
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(b) Notwithstanding clause (a), the Company's obligations in Sections
2.3, 2.4, 2.5, 2.6, 2.9, 7.7, 7.8, 8.3, 8.4 and 8.5 shall survive until the
Securities have been paid in full. Thereafter, the Company's obligations in
Sections 7.7, 8.3, 8.4 and 8.5 shall survive.
SECTION 8.2. Application of Trust Money. The Trustee shall hold in
--------------------------
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
SECTION 8.3. Repayment to Company. The Trustee and the Paying Agent
--------------------
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
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SECTION 8.4. Indemnity for Government Obligations. The Company shall
------------------------------------
pay and shall indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against deposited U.S. Government Obligations or the principal
and interest received on such U.S. Government Obligations.
SECTION 8.5. Reinstatement. If the Trustee or Paying Agent is
-------------
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8.
ARTICLE 9
AMENDMENTS AND WAIVERS
----------------------
SECTION 9.1. Without Consent of Holders. The Company and the
--------------------------
Trustee may amend this Indenture or the Securities without notice to or consent
of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
-------- -------
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to establish or maintain the Lien of this Indenture and the other
Collateral Documents as a perfected first priority Lien of the Trustee in
respect of the Collateral, to correct or amplify the description of any
Collateral subject to the Lien of the Indenture or the other Collateral
Documents and to subject additional property or assets to the Lien of this
Indenture or the other Collateral Documents;
(5) to add Guarantees with respect to the Securities or to further
secure the Securities;
(6) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
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(7) to enter into any Intercreditor Agreement (as defined in the
Security and Pledge Agreement);
(8) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
(9) to provide for the acceptance of appointment hereunder by a
successor Trustee; or
(10) to make any change that does not adversely affect the rights of
any Securityholder.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.2. With Consent of Holders. The Company and the Trustee
-----------------------
may amend this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in principal
amount of the Securities. In addition, the Holders of at least a majority in
principal amount of the Securities by written notice to the Trustee may waive
future compliance by the Company with any provision of this Indenture or the
Securities. However, without the consent of each Securityholder affected, an
amendment or waiver may not:
(1) reduce the percentage of principal amount of Securities whose
Holders must consent to an amendment or waiver;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) change the time at which any Security may or shall be redeemed in
accordance with Article 3;
(5) make any Security payable in money other than that stated in the
Security;
(6) impair the right of any Securityholder to institute suit for
enforcement of any payment on or with respect to any Security;
(7) permit the creation of any Lien on the Collateral or any part
thereof (other than the Lien of this Indenture and the other Collateral
Documents and other Permitted Liens (as defined herein on the Issue Date))
or terminate the Lien of this
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Indenture and the other Collateral Documents as to the Collateral or any
part thereof or deprive the Securityholders of the security afforded by the
Lien of this Indenture and the other Collateral Documents or any part
thereof, except as permitted pursuant to Section 4.12 or Article 10 as in
effect on the Issue Date; or
(8) make any change in Section 6.4 or 6.7 or the second sentence of
this Section which adversely affects the rights of any Securityholder.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment or waiver, but
it shall be sufficient if such consent approves the substance thereof.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such amendment
or waiver. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment or
waiver under this Section.
SECTION 9.3. Compliance with Trust Indenture Act. Every amendment
-----------------------------------
to this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.4. Revocation and Effect of Consents and Waivers. A
---------------------------------------------
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any
such Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment or waiver becomes effective. After
an amendment or waiver becomes effective, it shall bind every Securityholder.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
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<PAGE>
SECTION 9.5. Notation on or Exchange of Securities. If an amendment
-------------------------------------
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.6. Trustee To Sign Amendments. The Trustee shall sign any
--------------------------
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.1) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that (i) such
amendment is authorized or permitted by this Indenture and that all conditions
precedent to the execution, delivery and performance of such amendment have been
satisfied; and (ii) the Indenture together with such amendment complies with the
TIA.
SECTION 9.7. Payment for Consent. Neither the Company nor any
-------------------
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10
COLLATERAL DOCUMENTS
--------------------
SECTION 10.1. Collateral Documents. (a) In order to secure the due
--------------------
and punctual payment of the principal of and interest on the Securities when the
same becomes due and payable, whether at Stated Maturity, upon acceleration,
optional redemption, required purchase or otherwise, in accordance with the
terms of the Securities and this Indenture, the Company has created the Lien of
this Indenture and the Collateral Documents in respect of the Collateral in
favor of the Trustee for the benefit of the Securityholders. The Trustee and
the Company hereby agree that the Trustee holds the Collateral in trust for the
benefit of the Holders pursuant to the terms hereof and of the other Collateral
Documents.
(b) The Company covenants and agrees that it has full right, power and
lawful authority to grant, bargain, sell, release, convey, hypothecate, assign,
mortgage, pledge and transfer the Collateral, in the manner and form done, or
intended to be done, in
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<PAGE>
this Indenture and the other Collateral Documents, free and clear of all Liens
(other than Permitted Liens or as permitted by the Collateral Documents, subject
to the limitations contained therein), whatsoever, and that (i) it will forever
warrant and defend the title to the same against the claims of all persons
whatsoever, (ii) it will execute, acknowledge and deliver to the Trustee such
further assignments, transfers, assurances or other instruments as the Trustee
may require or request and (iii) it will do or cause to be done all such acts
and things as may be necessary or proper, or as may be required by the Trustee,
to assure and confirm to the Trustee the Lien of this Indenture and the
Collateral Documents in respect of the Collateral, or any part thereof, as from
time to time constituted, so as to render the same available for the security
and benefit of this Indenture and of the Securities. The Company further
covenants and agrees that this Indenture, the other Collateral Documents and the
actions taken hereunder and thereunder create a perfected first priority Lien on
the relevant portion of the Collateral, subject to Permitted Liens.
(c) As amongst the Holders, the Collateral as now or hereafter
constituted shall be held for the equal and ratable benefit of the Holders
without preference, priority or distinction of any thereof over any other by
reason of difference in time of issuance, sale or otherwise, as security for the
obligations hereunder and under the other Collateral Documents.
SECTION 10.2. General Authority. The Company hereby irrevocably
-----------------
appoints the Trustee its true and lawful attorney, with full power of
substitution, in the name of the Company, the Trustee, the Holders or otherwise,
for the sole use and benefit of the Trustee and the Holders, but at the
Company's expense, to the extent permitted by law to exercise, at any time and
from time to time while an Event of Default has occurred and is continuing, all
or any of the following powers and the powers contemplated by the Collateral
Documents with respect to all or any of the Collateral:
(i) to demand, sue for, collect, receive and give acquittance for any
and all monies due or to become due thereon or by virtue thereof;
(ii) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto; and
(iii) to sell, transfer, assign or otherwise deal in or with the same or
the proceeds thereof, as fully and effectually as if the Trustee were the
absolute owner thereof;
provided, that the Trustee shall give the Company not less than 10 days' prior
- --------
written notice of the time and place of any sale or other intended disposition
of any of the Collateral. The Company agrees that such notice constitutes
"reasonable notification" within the meaning of Section 9-504(3) of the Uniform
Commercial Code and for all other purposes. Each Holder, by its acceptance of a
Security, consents and agrees to the terms of the Collateral Documents and
authorizes and directs the Trustee to enter into each of the Collateral
Documents and to perform its obligations and exercise its rights thereunder in
accordance therewith; provided,
--------
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<PAGE>
however, that, if any provision of the Collateral Documents limits, qualifies or
- -------
conflicts with the duties imposed by the provisions of the TIA, the TIA
controls.
SECTION 10.3. Recording, Deposit of Pledged Securities, etc. (a)
---------------------------------------------
The Company will take or cause to be taken, at its own expense, all action
required or desirable to maintain, preserve and protect the Lien on the
Collateral granted by the Collateral Documents, including, but not limited to,
causing all financing statements, Mortgages, the Intellectual Property Security
Agreement and other instruments of further assurance, including continuation
statements covering security interests in personal property, to be promptly
recorded, registered and filed, and at all times to be kept recorded, registered
and filed, and shall execute and file such financing statements and cause to be
issued and filed such continuation statements, all in such manner and in such
places as may be required by law fully to preserve and protect the rights of the
Holders and the Trustee under this Indenture and the other Collateral Documents
to all property comprising the Collateral.
The Company shall from time to time promptly pay and discharge all
mortgage and financing and continuation statement recording and filing fees,
charges and taxes relating to this Indenture and the other Collateral Documents,
any amendments thereto and any other instruments of further assurance.
Upon the cancellation and discharge of any prior Lien, the Company
will cause all cash, Temporary Cash Investments, obligations and securities then
held by the trustee, mortgagee or other holder of such prior Lien, which were
received by such trustee, mortgagee or other holder on account of the release or
the taking by eminent domain or the purchase by a public authority or the sale
by virtue of a designation or order of a public authority or any other
disposition of, or insurance on, the Collateral, or any part thereof (including
all proceeds of or substitutions for any thereof), to be paid to or deposited
and pledged with the Trustee, such cash to be held and paid over or applied by
the Trustee, as provided in Article 11 hereof.
(b) As and when any Pledged Securities shall come into the possession
of the Company or any U.S. Restricted Subsidiary or under any of their control,
the Company shall forthwith deposit and pledge, or cause such U.S. Restricted
Subsidiary to deposit and pledge, the same with the Trustee, together with such
proper instruments of assignment and transfer as the Trustee may reasonably
require, which shall include express authority to the Trustee to vote any shares
of stock included therein and to cause such authority to be recorded in the
entry of transfer of such stock on the books of the corporation issuing the
same, all the foregoing to the extent provided or permitted by the Security and
Pledge Agreement. Such Pledged Securities will likewise be deemed to be a part
of and governed by the terms of the Security and Pledge Agreement.
(c) The Company shall furnish to the Trustee:
(i) at the time of execution and delivery of this Indenture, an
Opinion or Opinions of Counsel stating that (a) the Trustee has a valid and
enforceable perfected
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<PAGE>
first priority Lien in the Collateral pursuant to the Collateral Documents,
and the Collateral is free and clear of all Liens, other than Permitted
Liens, and (b) (1) this Indenture and the assignment of the Collateral
intended to be made by each Collateral Document and all other instruments
of further assurance or assignment have been properly recorded, registered,
filed and acted upon to the extent necessary to perfect the first priority
Lion intended to be created by each such Collateral Document and reciting
the details of such action or referring to prior Opinions of Counsel in
which such details are given, and stating that, as to the perfected first
priority Lien created pursuant to each such Collateral Document, such
recordings, registerings, filings and other actions are the only
recordings, registerings, filings and other actions necessary or advisable,
and further stating that all financing statements have been executed and
filed that are necessary or advisable, fully to preserve and protect the
rights of the Holders and the Trustee with respect to, and make valid and
enforceable, the perfected first priority Lien under this Indenture and
each other Collateral Document, and such recordings, registerings, filings
and other actions are in full force and effect; and (2) no such further
recording, registering, filing or action is necessary to perfect such first
priority Lien;
(ii) with respect to each Mortgage, a policy of title insurance insuring
(or committing to insure) the Lien of such Mortgage as a valid first
mortgage Lien on the real property and fixtures described therein in an
amount not less than the Fair Market Value thereof, which policy shall (a)
be issued by a reputable title company, (b) include such reinsurance
arrangements, if any (with provisions for direct access), as shall be
customary in the same general area, (c) have been supplemented by such
endorsements or, where such endorsements are not available at commercially
reasonable premium costs, opinion letters of reputable architects or other
reputable professionals (including endorsements or opinion letters on
matters relating to contiguity, first loss, if available, leasehold,
variable rate, usury, if available, and so-called comprehensive coverage
over covenants and restrictions, if available) and (d) contain only such
exceptions to title as shall be customary;
(iii) certified checks payable to the appropriate public officials or
title company (or checks or wire transfers to the title company in respect
of such amounts) in payment of all mortgage, recording, documentary,
intangible or similar governmental charges due in respect of the execution,
delivery or recording of such Mortgages, together with a check or wire
transfer for the title company in payment of its premium, search and
examination charges, survey costs and any other amounts due in connection
with issuance of its policies (or commitments); and
(iv) within 30 days after each anniversary of the Issue Date, an Opinion
or Opinions of Counsel, dated as of such date, either (a) to the effect
that, in the opinion of such counsel, such action has been taken with
respect to the recordings, registerings, filings, rerecordings,
reregisterings and refilings of all financing statements, continuation
statements or other instruments of further assurance as is necessary to
maintain the first priority Lien of this Indenture and each of the other
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Collateral Documents and reciting with respect to such perfected first
priority Lien the details of such action or referring to prior Opinions of
Counsel in which such details are given, and stating that all financing
statements and continuation statements have been executed and filed that
are necessary fully to preserve and protect the rights of the Holders and
the Trustee hereunder and under each of the other Collateral Documents or
(b) to the effect that, in the opinion of such counsel, no such action is
necessary to maintain such perfected first priority Lien.
SECTION 10.4. Disposition of Collateral Without Trustee Consent. (a)
-------------------------------------------------
Notwithstanding the provisions of Sections 4.12, 10.5, 10.6 and 10.7, so long as
no Event of Default shall have occurred and be continuing and the Company
complies with the provisions of Section 10.9, the Company may without any
consent by the Trustee:
(i) sell or otherwise dispose of any machinery, equipment, furniture,
apparatus, tools or implements, materials or supplies or other similar
property subject to the Lien of this Indenture and the other Collateral
Documents, which may have become worn or obsolete, not exceeding in value
in any one calendar year $2,000,000;
(ii) grant rights-of-way and easements over or in respect of any real
property; provided, that such grant shall not impair the usefulness of such
--------
property in any material respect in the conduct of the Company's business
and shall not be prejudicial to the interests of the Securityholders;
(iii) abandon, terminate, cancel, release or make alterations in or
substitutions of any leases, contracts or rights-of-way subject to the Lien
of this Indenture and the other Collateral Documents; provided, that any
--------
altered or substituted leases, contracts or rights-of-way shall forthwith,
without further action, be subject to the Lien of this Indenture and the
other Collateral Documents to the same extent as those previously existing;
provided, further, that, if the Company shall receive any money or property
-------- -------
in excess of the Company's expenses in connection with such termination,
cancellation, release, alteration or substitution (other than any such
money or property received in connection with a contract or lease
terminated, canceled, released, altered or substituted in the ordinary
course of business) as consideration or compensation for such termination,
cancellation, release, alteration or substitution, such money or property,
if it exceeds $1,000 (in which case all of the money and property so
received and not just the portion in excess of $1,000 shall be subject to
this clause), forthwith upon its receipt by the Company, shall be deposited
with the Trustee (unless otherwise required by a prior Permitted Lien) as
Trust Monies subject to disposition as Net Cash Proceeds as provided in
Section 4.7 and subjected to the Lien of this Indenture and the other
Collateral Documents;
(iv) surrender or modify any franchise, license or permit subject to
the Lien of this Indenture and the other Collateral Documents which it may
own or under which it may be operating; provided, that, if, after the
--------
surrender or
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<PAGE>
modification of any such franchise, license or permit, the Company shall
not be entitled, under some other, or without any, franchise, license or
permit, to conduct its business in the territory in which it is then
operating and the Fair Market Value of such franchise, license or permit
exceeds $5,000,000, then the Board of Directors shall have determined, in
its reasonable opinion, that such territory is not material to the conduct
of the Company's business; provided, further, that, if the Company shall be
-------- -------
entitled to receive any money or property in excess of the Company's
expenses in connection with such surrender or modification (other than any
such money or -property received in the ordinary course of business in
connection with a franchise, license or permit surrendered or modified) as
consideration or compensation for such surrender or modification, such
money or property, if it exceeds $1,000 (in which case all the money and
property so received and not just the portion in excess of $1,000 shall be
subject to this clause), forthwith upon its receipt by the Company, shall
be deposited with the Trustee (unless otherwise required by a prior
Permitted Lien) as Trust Monies subject to disposition as provided in
Section 4.7 and subjected to the Lien of this Indenture and the other
Collateral Documents;
(v) alter, repair, replace, change the location or position of and add
to its plants, structures, machinery, systems, equipment, fixtures and
appurtenances; provided, that no change in the location of any such
--------
Collateral subject to the Lien of this Indenture and the other Collateral
Documents shall be made which (1) removes such property into a jurisdiction
in which any instrument required by law to preserve the Lien of this
Indenture and any other Collateral Documents on such property, including
all necessary financing statements and continuation statements, has not
been recorded, registered or filed in the manner required by law to
preserve the Lien of this Indenture and the other Collateral Documents on
such property, (2) does not comply with the terms of this Indenture and the
other Collateral Documents or (3) otherwise impairs the Lien of the
Indenture and the other Collateral Documents;
(vi) demolish, dismantle, tear down or scrap any Collateral, or
abandon any thereof including any leases but excluding land or interests in
land, if such demolition, dismantling, tearing down, scrapping or
abandonment is in the best interests of the Company and the Fair Market
Value (except to the extent of the relevant Collateral being released) and
utility of the Collateral as an entirety will not thereby be impaired;
(vii) sell or otherwise dispose of other Collateral in insulated
transactions that do not exceed $150,000 per transaction, whether in a
single transaction or a series of related transactions which constitute a
single plan of disposition, and $2,000,000 in the aggregate; or
(viii) designate a Restricted Subsidiary as an Unrestricted
Subsidiary, in accordance with clauses (i), (ii) and (iii)(A) of Section
4.14(a), the effect of which is to release the assets and property of such
Subsidiary from the Lien of this Indenture and the other Collateral
Documents.
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<PAGE>
(b) In the event that the Company has sold, exchanged or otherwise
disposed of or proposes to sell, exchange or otherwise dispose of any portion of
the Collateral, or designates a Restricted Subsidiary as an unrestricted
Subsidiary as described above, which under the provisions of this Section may be
sold, exchanged, or otherwise disposed of, or so designated, by the Company
without any consent of the Trustee, such Collateral (or, in the case of such
designation, the assets and property of such Subsidiary comprising part of the
Collateral) shall be, upon such sale, exchange, or other disposition or
designation, automatically released from the Lien of this Indenture and the
other Collateral Documents, and the Company may request the Trustee to furnish a
written disclaimer, release or quitclaim of any interest in such Collateral
under this Indenture and any of the other Collateral Documents. If the Company
so requests, the Trustee shall execute such an instrument upon delivery to the
Trustee of (i) an Officers' Certificate by the Company reciting the sale,
exchange or other disposition or designation made or proposed to be made and
describing in reasonable detail the Collateral affected thereby, and stating
that such Collateral is Collateral which by the provisions of this Section may
be sold, exchanged or otherwise disposed of or dealt with by the Company without
any release or consent of the Trustee and (ii) where required by the TIA, an
Opinion of Counsel stating that the sale, exchange or other disposition or
designation made or proposed to be made was duly taken by the Company in
conformity with a designated subsection of Section 10.4(a).
Any disposition of Collateral made in strict compliance with the
provisions of this Section 10.4 shall be deemed not to impair the Lien of this
Indenture and the other Collateral Documents in contravention of the provisions
of this Indenture.
SECTION 10.5. Disposition of Inventory and Accounts Receivable
------------------------------------------------
Without Release. (a) Notwithstanding the provisions of Section 10.6, the
- ---------------
Company may without any release or consent by the Trustee sell, exchange or
otherwise dispose of inventory in the Ordinary Course of Business, assign,
collect, liquidate, sell, factor or otherwise dispose of accounts receivable in
the Ordinary Course of Business and dispose of the Proceeds thereof in
connection with the Company's business or to make other cash payments permitted
by this Indenture. Notwithstanding the foregoing and the terms of the Security
and Pledge Agreement, the Company's right to rely upon this Section 10.5(a) for
each six-month period beginning on January l and July 1 (a "Six-Month Period")
shall be conditioned upon the Company delivering to the Trustee, within 30 days
following the end of such Six-Month Period, an Officers' Certificate to the
effect that all sales, exchanges or other dispositions of inventory and
collections, liquidations, sales, factoring or other dispositions of accounts
receivable by the Company during such Six-Month Period were in the Ordinary
Course of Business and that all Proceeds therefrom were used by the Company in
connection with its business or to make other cash payments permitted by this
Indenture. The fair value of all sales, exchanges or other dispositions of
inventory and collections, liquidations, sales, factoring or other dispositions
of accounts receivable and the use of each in connection with the Company's
business and to make cash payments permitted by this Indenture by the Company in
accordance with this Section shall not be considered in determining whether the
aggregate fair value of Collateral released from the Lien of the Indenture in
any calendar year exceeds the 10% threshold specified in TIA (S) 314(d).
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(b) In the event that the Company has sold, exchanged or otherwise
disposed of or proposes to sell, exchange or other dispose of any item of
inventory and accounts receivable which under the provisions of this Section may
be sold, exchanged or otherwise disposed of by the Company without any release
or consent of the Trustee, and the Company requests the Trustee to furnish a
written disclaimer, release or quitclaim of any interest in such property under
the Indenture and the other Collateral Documents, the Trustee shall execute such
an instrument upon delivery to the Trustee of (i) an Officers' Certificate
reciting the sale, exchange or other disposition made or proposed to be made,
describing in reasonable detail the property affected thereby, and stating that
such property may be sold, exchanged or otherwise disposed of by the Company
without any release or consent of the Trustee in compliance with the provisions
of this Section and (ii) an Opinion of Counsel to the effect that the sale,
exchange or other disposition made or proposed to be made by the Company is in
compliance with the provisions of this Section.
(c) Any releases of Collateral made in compliance with the provisions
of this Section shall be deemed not to impair the Lien of the Indenture and
other Collateral Documents in contravention of the provisions of the Indenture.
SECTION 10.6. Release of Collateral with Trustee Consent. In
------------------------------------------
addition to its rights under Sections 10.4, 10.5 and 10.7, the Company shall
have the right, at any time and from time to time, unless an Event of Default
shall have occurred and be continuing, to sell, exchange or otherwise dispose of
any of the Collateral (other than Trust Monies, which are subject to release
from the Lien of this Indenture and the other Collateral Documents as provided
under Article 11 or upon substituting Substitute Collateral therefor as provided
in Section 10.7) (a "Release Termination"), upon compliance with the
requirements and conditions of Section 4.7, this Section and Section 10.9 and
the Trustee shall release the same from the Lien of this Indenture and any of
the other Collateral Documents upon receipt by the Trustee of a Release Notice
(as defined herein) requesting such release and describing the property to be so
released; provided, that:
--------
(a) If the Collateral to be released has a book value of at least
$3,000,000, the Trustee is provided with a Board Resolution requesting such
release and authorizing an application to the Trustee therefor.
(b) The security afforded by this Indenture and the other Collateral
Documents will not be impaired by such release in contravention of the
provisions of this Indenture and other Collateral Documents, and either (i)
other property is to be substituted as Substitute Collateral in accordance
with Section 10.7 or (ii) the proceeds from the property to be released are
being deposited in accordance with Section 4.7.
(c) The Company has disposed of or will dispose of the Collateral so
to be released for a consideration representing its Fair Market Value.
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(d) No Event of Default has occurred and is continuing (or will result
therefrom).
(e) If the Collateral to be released is only a portion of a discrete
parcel of real property, following such release and the release of the Lien
of any applicable Mortgage with respect thereto, the nonreleased mortgaged
property shall have sufficient utility services and sufficient access to
public roads, rail spurs, harbors, canals, terminals and other
transportation structures for the continued use of such mortgaged property
in substantially the manner carried on by the Company and its Subsidiaries
prior to such release.
(f) If the Collateral to be released is only a portion of a discrete
parcel of real property, following such release, the nonreleased mortgaged
property shall comply in all material respect with applicable laws, rules,
regulations and ordinances relating to land use and building and workplace
safety.
(g) If the Collateral to be released is only a portion of a discrete
parcel of real property, following such release, the Fair Market Value of
the mortgaged property (exclusive of the Fair Market Value of the released
mortgaged property) shall not be less than the Fair Market Value of such
mortgaged property prior to such release.
(h) If the Collateral to be released is only a portion of a discrete
parcel of real property, the Company shall have delivered to the Trustee a
survey depicting the real property to be released.
(i) The first priority perfected Lien pursuant to the Collateral
Documents shall be in full force and effect continuously and uninterrupted
at all times.
(j) If the Collateral so to be released is subject to a prior
Permitted Lien, there shall be delivered to the Trustee a certificate of
the trustee, mortgagee or other holder of such prior Permitted Lien that it
has received the applicable Net Cash Proceeds (except to the extent that
the assignment thereof would violate the terms thereof or any agreement
relating thereto) and has been irrevocably authorized by the Company to pay
over to the Trustee any balance of such Net Cash Proceeds remaining after
the discharge of such Indebtedness secured by such prior Permitted Lien;
and if any property other than cash, Temporary Cash Investments or other
obligations is included in the consideration for any Collateral to be
released, there shall be delivered to the Trustee such instruments of
conveyance, assignment and transfer, if any, as may be reasonably
necessary, in the Opinion of Counsel to be given pursuant to paragraph (l),
to subject to the Lien of this Indenture and the other Collateral Documents
all the right, title and interest of the Company in and to such Collateral.
(k) If the Collateral to be released is only a portion of a discrete
parcel of real property, there shall be delivered to the Trustee evidence
that a title company
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shall have committed to issue an endorsement to the title insurance policy
relating to the nonreleased mortgaged property confirming that, after such
release, the Lien of the applicable Mortgage continues unimpaired as a
first priority perfected Lien upon the remaining mortgaged property.
(l) An Opinion of Counsel shall be delivered to the Trustee
substantially to the effect (subject to customary exceptions) (i) that any
obligation included in the consideration for any property so to be released
and to be received by the Trustee pursuant to Section 10.6(j) is a valid
and binding obligation enforceable in accordance with its terms and is
effectively pledged under the Collateral Documents, (ii) that any Lien
granted by a purchaser to secure Purchase Money Indebtedness is a first
priority purchase money Lien and such instrument granting such Lien is
enforceable in accordance with its terms, (iii) either (x) that such
instruments of conveyance, assignment and transfer as have been or are then
delivered to the Trustee are sufficient to subject to the first priority
Lien of this Indenture and the other applicable Collateral Documents all
the right, title and interest of the Company in and to any property, other
than cash, Temporary Cash Investments and obligations, that is included in
the consideration for the Collateral so to be released and is to be
received by the Trustee pursuant to Section 10.6(j) or (y) that no
instruments of conveyance, assignment or transfer are necessary for such
purpose, (iv) that the Company has corporate power to own all property
included in the consideration for such release, (v) in case any part of the
money or obligations referred to in Section 10.6(j) has been deposited with
a trustee or other holder of a prior Permitted Lien, that the Collateral to
be so released, or a specified portion thereof, is or immediately before
such release was subject to such prior Permitted Lien and that such deposit
is required by such prior Permitted Lien and (vi) that the Company has
complied with all conditions precedent herein and under any of the other
Collateral Documents provided for relating to the release of such
Collateral.
(m) The Company shall deliver to the Trustee an Officers' Certificate,
dated not more than 30 days prior to the date of the application for such
release, with respect to the matters described in subsections (a) through
(k).
In connection with any release, the Company shall (i) execute, deliver
and record or file and obtain such instruments as the Trustee may reasonably
require, including, without limitation, amendments to the Collateral Documents
and this Indenture, and (ii) deliver to the Trustee such evidence of the
satisfaction of the Indenture and the other Collateral Documents as the Trustee
may reasonably require.
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The Company shall exercise its rights under this Section by delivery
to the Trustee of a notice (each, a "Release Notice"), which shall refer to this
Section, describe with particularity the items of property proposed to be
covered by the release and be accompanied by a counterpart of the instruments
proposed to give effect to the release fully executed and acknowledged (if
applicable) by all parties thereto other than the Trustee and in form for
execution by the Trustee. Upon such compliance, the Company shall direct the
Trustee to execute, acknowledge (if applicable) and deliver to the Company such
counterpart within 10 Business Days after receipt by the Trustee of a Release
Notice and the satisfaction of the requirements of this covenant.
In case an Event of Default shall have occurred and be continuing, the
Company, while in possession of the Collateral (other than cash, Temporary Cash
Investments, securities and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder or under the other Collateral
Documents or with the trustee, mortgagee or other holder of a prior Permitted
Lien), may do any of the things enumerated in this Section, if the Trustee in
its discretion, or the Holders of 66-2/3% in aggregate principal amount of the
Securities outstanding, by appropriate action of such Holders, shall consent to
such action, in which event any certificate filed under this Section shall omit
the statement to the effect that no Event of Default has occurred and is
continuing. This paragraph shall not apply, however, during the continuance of
an Event of Default of the type specified in Section 6.1(1), (2), (3), (9) or
(10).
All cash or Temporary Cash Investments received by the Trustee
pursuant to this Section shall be held by the Trustee, for the benefit of the
Securityholders, as Trust Monies under Article 11 subject to application as
therein provided or as provided in Section 4.7. All purchase money and other
obligations received by the Trustee pursuant to this Section shall be held by
the Trustee for the benefit of the Holders as Collateral.
Any releases of Collateral made in strict compliance with the
provisions of this Section shall be deemed not to impair the Lien of this
Indenture and the other Collateral Documents in contravention of the provisions
of this Indenture.
SECTION 10.7. Substitute Collateral. (a) The Company may, at its
---------------------
option, obtain a release of any of the Collateral (including any Trust Monies
other than Trust Monies which at such time (i) constitute Excess Proceeds for
purposes of Section 4.7 or (ii) have been deposited with the Paying Agent in an
amount sufficient to pay (A) the aggregate Change of Control Purchase Price of
all Securities or portions thereof that are to be purchased on the Change of
Control Purchase Date pursuant to Section 4.9 or (B) the redemption price of and
accrued interest on all Securities or portions thereof to be redeemed on the
redemption date in accordance with the requirements of paragraphs 5 and 6 set
forth on the reverse of the Securities) by subjecting other property, if such
substitute property has a Fair Market Value equal to or greater than the
Collateral to be released (the "Substitute Collateral") to the perfected first
priority Lien of this Indenture and the other Collateral Documents or a similar
instrument in place of and in exchange for any of the Collateral to be released,
all in accordance with this Section and Section 10.9.
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(b) Substitute Collateral may be substituted for other Substitute
Collateral on the terms set forth in this Section.
(c) Unless an Event of Default shall have occurred and be continuing,
the Trustee shall release any of the Collateral from the Lien of this Indenture
and any of the other Collateral Documents and accept the Substitute Collateral
subject to the Lien of this Indenture and the other Collateral Documents upon
receipt thereof by the Trustee of:
(i) an application of the Company requesting such substitution of
Substitute Collateral for any of the Collateral and describing the property
to be so released and the property to be substituted therefor;
(ii) the Board Resolutions, certificates, opinions and other statements
listed in Sections 10.6(a), (k), (l) and (m), as and to the extent
applicable, in respect of any of the Collateral to be released;
(iii) an Officers' Certificate, dated not more than 30 days prior to
the date of the application for the substitution stating in substance the
Fair Market Value, in the opinion of the signers, of the Substitute
Collateral;
(iv) if the Substitute Collateral is real property:
(1) an instrument in recordable form sufficient for the first
priority Lien of this Indenture and any Mortgage to cover the
Substitute Collateral which, if the real property is a leasehold or
easement interest, shall include normal and customary provisions with
respect thereto and evidence of the filing of all such financing
documents as may be necessary to perfect such Liens;
(2) a Mortgagee Policy of Title Insurance on the forms then
prescribed by the American Land Title Association (or the then
prevailing equivalent of such policy) insuring that the Lien of this
Indenture and any Mortgage constitutes a direct and valid and
perfected first priority mortgage Lien on such Substitute Collateral
in an aggregate amount equal to the Fair Market Value of the
Substitute Collateral, together with an Officers' Certificate stating
that any specific exceptions to such title insurance are Permitted
Liens and such endorsements and other opinions as are contemplated by
Section 10.3(c)(ii);
(3) an American Land Title Association survey with respect
thereto; and
(4) evidence of payment or a closing statement indicating
payments to be made by the Company of all title premiums, search and
examination charges, recording charges, survey costs, transfer taxes
and other costs and
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expenses, including reasonable legal fees and disbursements of counsel
for the Trustee (and any local counsel), that may be incurred to
validly and effectively subject the Substitute Collateral to the first
priority Lien of this Indenture and any other applicable Collateral
Document to perfect such Lien; and
(v) if the Substitute Collateral is a personal property interest:
(1) an instrument sufficient for the first priority Lien of this
Indenture and any other applicable Collateral Document to cover the
Substitute Collateral;
(2) to the extent not otherwise required by Section 10.7(c) (ii),
an Opinion of Counsel (subject to customary exceptions) stating that
the Lien of this Indenture and the other Collateral Documents
constitutes a perfected first priority Lien on such Substitute
Collateral, together with an Officers' Certificate stating that any
specific exceptions to such Lien are Permitted Liens; and
(3) evidence of payment or a closing statement indicating
payments to be made by the Company of all filing fees, recording
charges, transfer taxes and other costs and expenses, including
reasonable legal fees and disbursements of counsel for the Trustee
(and any local counsel), that may be incurred to validly and
effectively subject the Substitute Collateral to the first priority
Lien of the Indenture and any other Collateral Document.
SECTION 10.8. Eminent Domain and Other Governmental Takings. If any
---------------------------------------------
of the Collateral be taken by eminent domain or be sold pursuant to the exercise
by the United States of America or any state, municipality or other governmental
authority of any right which it may then have to purchase, or to designate a
purchaser or to order a sale of, all or any part of the Collateral, the Trustee
shall release the property so taken or purchased, but only upon receipt by the
Trustee of the following:
(a) an Officers' Certificate stating that (i) such property has
been taken by eminent domain and the amount of the award therefor, or
that such property has been sold pursuant to a right vested in the
United States of America, any State or municipality thereof or other
governmental authority to purchase, or to designate a purchaser or
order a sale of, such property and the amount of the proceeds of such
sale, and that all conditions precedent herein provided for relating
to such release have been complied with and (ii) that the amount of
the proceeds of the property so sold is not less than the amount to
which the Company is entitled under the terms of such right to
purchase or designate a purchaser, or under the order or orders
directing such sale, as the case may be;
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(b) the award for such property or the proceeds of such sale, for
the Trustee to hold as Trust Monies subject to the disposition thereof
pursuant to Section 4.7; provided, however, that, in lieu of all or
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any part of such award or proceeds, the Company shall have the right
to deliver to the Trustee a certificate of the trustee, mortgagee or
other holder of a prior Lien on all or any part of the property to be
released, stating that such award or proceeds, or a specified portion
thereof, has been deposited with such trustee, mortgagee or other
holder pursuant to the requirements of such prior Lien, in which case
the balance of the award, if any, shall be delivered to the Trustee;
and
(c) an Opinion of Counsel substantially to the effect that:
(1) such property has been taken by eminent domain, or has
been sold pursuant to the exercise of a right vested in the
United States of America, any State or municipality thereof or
other governmental authority to purchase, or to designate a
purchaser or order a sale of, such property;
(2) in the case of any such taking by eminent domain, the
award for the property so taken has become final or, to the best
of such counsel's knowledge, no appeal is contemplated or
pending;
(3) in case, pursuant to Section 10.8(b), the award for such
property or the proceeds of such sale, or a specified portion
thereof, shall be certified to have been deposited with the
trustee, mortgagee or other holder of a prior Lien, that the
property to be released, or a specified portion thereof, is or
immediately before such taking or purchase was subject to such
prior Lien, and that such deposit is required by such prior Lien;
and
(4) that the instrument or the instruments and the award or
proceeds of such sale which have been or are therewith delivered
to and deposited with the Trustee conform to the requirements of
this Indenture and any of the other Collateral Documents and
that, upon the basis of such application, the Trustee is
permitted by the terms hereof and of the other Collateral
Documents to execute and deliver the release requested, and that
all conditions precedent herein provided for relating to such
release have been complied with.
In any proceedings for the taking or purchase or sale of any part of
the Collateral, by eminent domain or by virtue of any such right to purchase or
designate a purchaser or to order a sale, the Trustee may be represented by
counsel who may be counsel for the Company.
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All cash received by the Trustee pursuant to this Section 10.8 shall
be held by the Trustee as Trust Monies under Article 11 subject to application
as therein provided or as provided in Section 4.7. All purchase money and other
obligations received by the Trustee pursuant to this Section 10.8 shall be held
by the Trustee as Collateral subject to application as provided in Section
10.13.
SECTION 10.9. TIA Requirements. (a) The release of any Collateral
----------------
from the terms hereof and of any of the other Collateral Documents or the
release of, in whole or in part, the Liens created by any of the Collateral
Documents, shall not be deemed to impair the perfected first priority Lien of
this Indenture and the other Collateral Documents in contravention of the
provisions hereof if and to the extent the Collateral or Lien are released
pursuant to the applicable Collateral Documents and pursuant to the terms
hereof. The Trustee end each of the Holders acknowledge that a release of
Collateral or Liens strictly in accordance with the terms of the Collateral
Documents and the terms hereof will not be deemed for any purpose to be an
impairment of the Liens in contravention of the terms of this Indenture.
(b) To the extent applicable, without limitation, the Company and
each obligor on the Securities shall comply with TIA (S) 314(d) relating to the
release of property or securities from the Lien of each of this Indenture and of
the other Collateral Documents. Any certificate or opinion required by TIA (S)
314(d) may be made by an officer of the Company, except in cases which TIA (S)
314(d) requires that such certificate or opinion be made by an independent
person.
SECTION 10.10. Suits to Protect the Collateral. Subject to the
-------------------------------
provisions of the Collateral Documents, the Trustee shall have power to
institute and to maintain such suits and proceedings as it may deem expedient to
prevent any impairment of the Collateral by any acts which may be unlawful or in
violation of any of the Collateral Documents, and such suits and proceedings as
the Trustee may deem expedient to preserve or protect its interests and the
interests of the Securityholders in the Collateral (including power to institute
and maintain suits or proceedings to restrain the enforcement of or compliance
with any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance with,
such enactment, rule or order would impair the Liens of this Indenture and the
other Collateral Documents or be prejudicial to the interests of the
Securityholders or the Trustee).
SECTION 10.11. Purchaser Protected. In no event shall any purchaser
-------------------
in good faith or any property purported to be released hereunder be bound to
ascertain the authority of the Trustee to execute the release or to inquire as
to the satisfaction of any conditions required by the provisions hereof for the
exercise of such authority or to see to the application of any consideration
given by such purchaser or other transferee; nor shall any purchaser or other
transferee of any property or rights permitted by this Article to be sold be
under obligation to ascertain or inquire into the authority of the Company to
make any such sale or other transfer.
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SECTION 10.12. Powers Exercisable by Receiver or Trustee. In case
-----------------------------------------
the Collateral shall be in the possession of a receiver or trustee, lawfully
appointed, the powers conferred in this Article upon the Company with respect to
the release, sale or other disposition of such property may be exercised by such
receiver or trustee, and an instrument signed by such receiver or trustee shall
be deemed the equivalent of any similar instrument of the Company or of any
officer or officers thereof required by the provisions of this Article.
SECTION 10.13. Disposition of Obligations Received. All obligations
-----------------------------------
(including, without limitation, securities received in connection with an Asset
Disposition) received by the Trustee under this Article shall be held by the
Trustee as a part of the Collateral. Upon payment in cash or Temporary Cash
Investments by or on behalf of the Company to the Trustee of the entire unpaid
principal amount of any such obligation, to the extent not constituting Net Cash
Proceeds which at such time (i) constitute Excess Proceeds for purposes of
Section 4.7 or (ii) have been deposited with the Paying Agent in an amount
sufficient to pay (A) the aggregate Change of Control Purchase Price of all
Securities or portions thereof that are to be purchased on the Change of Control
Purchase Date pursuant to Section 4.9 or (B) the redemption price- of and
accrued interest on all Securities or portions thereof to be redeemed on the
redemption date in accordance with the requirements of Section 3.1, the Trustee
shall release and transfer such obligation and any mortgage securing the same
upon receipt of any documentation that the Trustee may reasonably require. Any
cash or Temporary Cash Investments received by the Trustee in respect of the
principal of any such obligations shall be held by the Trustee as Trust Monies
under Article 11 subject to application as therein provided and as provided in
the Collateral Documents. Until the Securities are accelerated pursuant to
Section 6.2, all interest and other income on any such obligations, when
received by the Trustee, shall be paid to the Company from time to time. If the
Securities have been accelerated pursuant to Section 6.2, any such interest or
other income not theretofore paid, when collected by the Trustee, shall be
applied by the Trustee in accordance with Section 6.10.
SECTION 10.14. Limitation on Duty of Trustee in Respect of Collateral;
-------------------------------------------------------
Indemnification. (a) Beyond the exercise of reasonable care in the custody
- ---------------
thereof, the Trustee shall have no duty as to any Collateral in its possession
or control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Trustee shall be deemed to have exercised
reasonable care in the custody of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which it accords
its own property, and shall not be liable or responsible for any loss or
diminution in the value of any of the Collateral, by reason of the act or
omission of any carrier, forwarding agent or other agent or bailee selected by
the Trustee in good faith.
(b) The Trustee shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity, perfection,
priority or enforceability of the Liens in any of the Collateral, whether
impaired by operation of law or by reason of any
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action or omission to act on its part hereunder, except to the extent such
action or omission constitutes negligence, bad faith or wilful misconduct on the
part of the Trustee.
(c) In the event that the Company fails to comply with the provisions
of this Indenture or the other Collateral Documents such that the value of any
Collateral or the validity, perfection, rank or value of the Lien hereunder or
thereunder is thereby diminished or potentially diminished or put at risk, the
Trustee may, but shall not be required to, effect such compliance on behalf of
the Company, and the Company shall reimburse the Trustee for the costs thereof
on demand. All expenses of protecting, storing, insuring and handling the
Collateral, any and all excise, property, sales, and use taxes imposed by any
state, Federal or local authority on any of the Collateral, or expenses in
respect of (i) the sales or other disposition thereof, (ii) the administration
or enforcement thereof, (iii) the exercise by the Trustee of any of the rights
conferred upon it hereunder, including the preservation of the validity,
perfection, rank or value of any Lien or (iv) any Default or Event of Default,
shall be borne and paid by the Company; and if the Company fails to promptly pay
any portion of such expenses when due, the Trustee may, at its option, but shall
not be required to, pay the same and charge the Company's account therefor and
the Company agrees to reimburse the Trustee therefor on demand. All sums so
paid or incurred by the Trustee for any of the foregoing and any and all other
sums for which the Company may become liable hereunder and all costs and
expenses (including reasonable attorneys' fees, legal expenses and court costs)
reasonably incurred by the Trustee in enforcing or protecting the Lien of this
Indenture or the other Collateral Documents or any of its rights or remedies
under this Indenture shall, together with interest thereon until paid at the
rate applicable to the Securities, be deemed to be secured hereby and under the
other Collateral Documents.
SECTION 10.15. Release upon Termination of the Company's Obligations.
-----------------------------------------------------
(a) In the event that this Indenture shall cease to be of further effect
pursuant to Section 8.1, the Trustee shall upon demand deliver to the Company,
on behalf of the Securityholders, a notice disclaiming, relinquishing and
releasing any and all rights it has in respect of the Collateral and any other
instruments or documents evidencing or effecting such release that the Company
may reasonably request.
(b) Any release of any portion of the Collateral made strictly in
compliance with the provisions of this Section shall not be deemed to impair the
Liens created by this Indenture and the other Collateral Documents in
contravention of the provisions of this Indenture.
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ARTICLE 11
APPLICATION OF TRUST MONIES
---------------------------
SECTION 11.1. "Trust Monies" Defined. All cash or Temporary Cash
----------------------
Investments received by the Trustee in accordance with the terms of this
Indenture and the other Collateral Documents:
(a) upon the release of property from the Lien of this Indenture and
any of the other Collateral Documents, including all monies received in
respect of the principal of all purchase money, governmental and other
obligations;
(b) as compensation for, or proceeds of sale of, any part of the
Collateral taken by eminent domain or purchased by, or sold pursuant to an
order of, a governmental authority or otherwise disposed of;
(c) as proceeds of insurance upon any part of the Collateral (other
than any liability insurance proceeds payable to the Company or the Trustee
for any loss, liability or expense incurred by it),
(d) pursuant to the provisions of Sections [1.4 and 2.1] of any of
the Mortgages;
(e) as proceeds in the lockboxes or otherwise held pursuant to
Article 8 of the Security and Pledge Agreement; or
(f) for application under this Article as elsewhere provided in this
Indenture or any other Collateral Document, or whose disposition is not
elsewhere otherwise specifically provided for herein or in any other
Collateral Document;
(all such monies being herein sometimes collectively referred to as "Trust
Monies"), shall be held by the Trustee for the benefit of the Holders as a part
of the Collateral securing the Securities and, upon any entry upon or sale of
the Collateral or any part thereof pursuant to Article 6, the Trust Monies shall
be applied in accordance with Section 6.10 hereof; but, prior to any such entry
or sale, all or any part of the Trust Monies may be withdrawn, and shall be
released, paid or applied by the Trustee, from time to time as provided in
Sections 4.7, 10.7 and 11.2 to 11.6, inclusive.
SECTION 11.2. Retirement of Securities. The Trustee shall apply
------------------------
Trust Monies from time to time to the payment of the principal and interest on
any Securities, at final Maturity or to the purchase thereof pursuant to Section
4.7 or Section 4.9, as the Company shall request, upon receipt by the Trustee of
the following:
(a) a Board Resolution directing the application pursuant to this
Section of a specified amount of Trust Monies and, in any case any such
monies are to be
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applied to payment, designating the Securities so to be paid and
prescribing the method of purchase, the price or prices to be paid and the
maximum principal amount of Securities to be purchased and any other
provisions of this Indenture governing such purchase;
(b) cash which, together with any Trust Monies then held by the
Trustee, equals or exceeds in the aggregate the maximum amount of the
accrued interest, if any, required to be paid in connection with any such
purchase, which cash shall be held by the Trustee in trust for such
purpose;
(c) an Officers' Certificate, dated not more than five days prior to
the date of the relevant application, stating that all conditions precedent
and covenants herein provided for relating to such application of Trust
Monies have been complied with; and
(d) an Opinion of Counsel stating that the documents and the cash or
Temporary Cash Investments, if any, which have been or are therewith
delivered to and deposited with the Trustee conform to the requirements of
this Indenture and that all conditions precedent herein provided for
relating to such application of Trust Monies have been complied with.
Upon compliance with the foregoing provisions of this Section 11.2,
the Trustee shall apply Trust Monies as directed and specified by such Board
Resolution up to, but not exceeding, the principal amount of the Securities so
paid plus any accrued interest required in connection with such purchase.
A Board Resolution expressed to be irrevocable directing the
application of Trust Monies under this Section to the payment of the principal
of particular Securities shall for all purposes of this Indenture be deemed the
equivalent of the deposit of money with the Trustee in trust for such purpose.
Such Trust Monies and any cash deposited with the Trustee, pursuant to
subsection (b) of this Section for the payment of accrued interest, shall not,
after compliance with the foregoing provisions of this Section, be deemed to be
part of the Collateral or Trust Monies.
SECTION 11.3. Withdrawals of Insurance Proceeds and Condemnation
--------------------------------------------------
Awards. To the extent that any Trust Monies consist of either (a) the proceeds
- ------
of insurance upon any part of the Collateral or (b) any award for or the
proceeds from any of the Collateral being taken by eminent domain or sold
pursuant to the exercise by the United States of America, any State or
municipality thereof or other governmental authority of any right which it may
then have to purchase, or to designate a purchaser or to order a sale of any
part of the Collateral, such Trust Monies may be withdrawn by the Company and
shall be paid by the Trustee upon a request by the Company to the Trustee by the
proper officer or officers of the Company to reimburse the Company for
expenditures made, or to pay costs incurred, by the Company in connection with
the repair, rebuild or replace the property destroyed, damaged or taken, upon
receipt by the Trustee of the following:
-84-
<PAGE>
(a) An Officers' Certificate, dated not more than 30 days prior to the date
of the application for the withdrawal and payment of such Trust Monies,
setting forth:
(i) that expenditures have been made, or costs incurred, by the
Company in a specified amount in connection with certain repairs,
rebuildings and replacements of the Collateral, which shall be briefly
described, and stating the Fair Market Value thereof to the Company at
the date of the acquisition thereof by the Company;
(ii) that no part of such expenditures or costs, in any previous
or then pending application, has been or is being made the basis for
the withdrawal of any Trust Monies pursuant to this Section;
(iii) that no part of such expenditures or costs has been paid
out or either the proceeds of insurance upon any part of the
Collateral not required to be paid to the Trustee under Section [1.12]
of any Mortgage or any award for or the proceeds from any of the
Collateral being taken not required to be paid to the Trustee under
Section 10.8, as the case may be;
(iv) that there is no outstanding indebtedness, other than costs
for which payment is being requested, known to the Company, after due
inquiry, for the purchase price or construction of such repairs,
rebuildings or replacements, or for labor, wages, materials or
supplies in connection with the making thereof, which, if unpaid,
might become the basis of a vendor's, mechanics', laborers',
materialmen's, statutory or other similar Lien upon any of such
repairs, rebuildings or replacement, which Lien might, in the opinion
of the signers of such Officers' Certificate, materially impair the
security afforded by such repairs, rebuildings or replacement;
(v) that the property to be repaired, rebuilt or replaced is
necessary or desirable in the conduct to the Company's business;
(vi) that the Company has title to such repairs, rebuildings and
replacements that is substantially similar to its title to the
property destroyed, damaged or taken;
(vii) that no Event of Default shall have occurred and be
continuing; and
(viii) that the Company has complied with all conditions
precedent herein provided for relating to such withdrawal and payment.
(b) An Opinion of Counsel substantially stating:
-85-
<PAGE>
(i) that the instruments that have been or are therewith
delivered to the Trustee conform to the requirements of this Indenture
or any other Collateral Document, and that, upon the basis of such
Company request and the accompanying documents specified in this
Section, all conditions precedent herein provided for relating to such
withdrawal and payment have been Complied with, and the Trust Monies
whose withdrawal is then requested may be lawfully paid over under
this Section; and
(ii) that all the Company's right, title and interest in and to
said repairs, rebuilding or replacements, or combination thereof, are
then subject to the first priority Lien of this Indenture and any of
the other Collateral Documents.
Upon compliance with the foregoing provisions of this Section, the
Trustee shall on Company request pay an amount of Trust Monies of the character
aforesaid equal to the amount of the expenditures or costs stated in the
Officers' Certificate required by paragraph (i) of subsection (a) of this
Section, or the Fair Market Value to the Company of such repairs, rebuildings
and replacements stated in such Officers' Certificate, whichever is less;
provided, however, that notwithstanding the above, so long as no Event of
- -------- -------
Default or Default shall have occurred and be continuing, in the event that any
insurance proceeds or award for such property or proceeds of such sale does not
exceed $25,000 and, in the good faith estimate of the Company, such destruction
or damage resulting in such insurance proceeds or such taking or sale resulting
in such award does not detrimentally affect the value or use of the applicable
Collateral in any material respect, upon delivery to the Trustee of an Officers'
Certificate to such effect, the Trustee shall release to the Company such
insurance proceeds or award for such property or proceeds of such sale, free of
the Lien hereof and of the applicable Collateral Documents; provided, that the
--------
Company shall take all steps necessary to notify the condemning authority of
such assignment.
SECTION 11.4. Release of Real Estate Tax Monies; Rents. (a) To the
----------------------------------------
extent that any Trust Monies consist of monies deposited by the Company with the
Trustee in respect of taxes, assessments and other items required to be paid by
the Company pursuant to Section [1.04] of the Mortgages, the Trustee shall
directly remit funds in payment thereof in accordance with the provisions of the
bills, invoices or statements therefor upon receipt by the Trustee, at least 20
days prior to the date that such bills, invoices and statements are deemed
delinquent or any penalties assessed in accordance with their respective terms,
an Officers' Certificate setting forth, in an itemized fashion, the specific
taxes, assessments and other items and amounts owing in respect thereof of which
such funds apply, together with true copies of the respective bills, invoices or
statements therefor, and certifying the validity and accuracy of each thereof.
(b) To the extent that any Trust Monies consist of monies collected
by the Trustee in respect of rents, issues, income and profits pursuant to
Section [2.01] of the Mortgages, upon Company request, the Trustee shall return
such funds to the Company upon receipt by the Trustee of an Officers'
Certificate stating that no Event of Default or Default
-86-
<PAGE>
shall have occurred and be continuing and there are no occurrences or
circumstances which, with the giving of notice or passage of time, or both,
could result in the occurrence of an Event of Default, a Default or a default'
under any other Indebtedness of the Company.
SECTION 11.5. Powers Exercisable Notwithstanding Event of Default.
---------------------------------------------------
In case an Event of Default shall have occurred and shall be continuing, the
Company, while in possession of the Collateral (other than cash, Temporary Cash
Investments, securities and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder or under the other Collateral
Documents or with the trustee, mortgage or other holder of a prior Lien), may do
any of the things enumerated in Sections 11.2, 11.3 and 11.4 if the Trustee in
its discretion, or the Holders of a majority in aggregate principal amount of
the Securities outstanding, by appropriate action of such Holders, shall consent
to such action, in which event any certificate filed under any of such Sections
shall omit the statement to the effect that no Event of Default has occurred and
is continuing. This Section shall not apply, however, during the continuance of
an Event of Default of the type specified in Section 6.1(1) or (2).
SECTION 11.6. Powers Exercisable by Trustee or Receiver. In case the
-----------------------------------------
Collateral (other than any cash, Temporary Cash Investments, securities and
other personal property held by, or required to be deposited or pledged with,
the Trustee hereunder or under the other Collateral Documents or with the
trustee, mortgagee or other holder of a prior Permitted Lien) shall be in the
possession of a receiver or trustee lawfully appointed, the powers hereinbefore
in this Article 11 conferred upon the Company with respect to the withdrawal or
application of Trust Monies may be exercised by such receiver or trustee, in
which case a certificate signed by such receiver or trustee shall be deemed the
equivalent of any Officers' Certificate required by this Article 11. If the
Trustee shall be in possession of any of the Collateral hereunder or under any
of the other Collateral Documents, such powers may be exercised by the Trustee
in its discretion.
SECTION 11.7. Disposition of Securities Retired. All Securities
---------------------------------
received by the Trustee and for whose purchase Trust Monies are applied under
this Article 11 may, but shall not be required to, be promptly canceled by the
Trustee and returned to the Company.
SECTION 11.8. Investment of Trust Monies. All or any part of any
--------------------------
Trust Monies held by the Trustee hereunder (except such as may be held for the
account of any particular Securities) shall from time to time be invested or
reinvested by the Trustee pursuant to the specific written direction of the
Company (so long as no Event of Default has occurred and is continuing) in any
Temporary Cash Investments. Unless an Event of Default occurs and is
continuing, any interest in such Temporary Cash Investments (in excess of any
accrued interest paid at the time of purchase) which may be received by the
Trustee shall be forthwith paid to the Company. Such Temporary Cash Investments
shall be held by the Trustee as a part of the Collateral, subject to the same
provisions hereof as the cash used by it to purchase such Temporary Cash
Investments.
-87-
<PAGE>
The Trustee shall not be liable or responsible for any loss resulting
from such investments or sales except only for its own negligent action, its own
negligent failure to act or its own wilful misconduct in complying with this
Section.
ARTICLE 12
MISCELLANEOUS
-------------
SECTION 12.1. Trust Indenture Act Controls. If and to the extent
----------------------------
that any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by, or with another provision (an "incorporated provision")
included in this Indenture by operation of, Sections 310 to 318, inclusive, of
the TIA, such imposed duties or incorporated provision shall control.
SECTION 12.2. Notices. Any notice or communication shall be in
-------
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
Anacomp, Inc.,
[11550 North Meridian Street
Carmel, IN 46032]
Attention of:
if to the Trustee:
The Bank of New York
101 Barclay Street - 21W
New York, N.Y. 10286
Attention of Corporate Trust - Trustee
Administration
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
-88-
<PAGE>
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 12.3. Communication by Holders with Other Holders.
-------------------------------------------
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 12.4. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 12.5. Statements Required in Certificate or Opinion. Each
---------------------------------------------
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 12.6. Rules by Trustee, Paying Agent and Registrar. The
--------------------------------------------
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
-89-
<PAGE>
SECTION 12.7. Legal Holidays. A "Legal Holiday" is a Saturday, a
--------------
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 12.8. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL
-------------
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 12.9. No Recourse Against Others. A director, officer,
--------------------------
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
SECTION 12.10. Successors. All agreements of the Company in this
----------
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 12.11. Multiple Originals. The parties may sign any number
------------------
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 12.12. Table of Contents; Headings. The table of contents,
---------------------------
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 12.13. Severability. In case any provision in this
------------
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
-90-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
ANACOMP, INC.
by
-----------------------------------
Name:
Title:
__________________________________,
THE BANK OF NEW YORK
as Trustee
by
-----------------------------------
Name:
Title:
-91-
<PAGE>
EXHIBIT A
[FORM OF FACE OF SECURITY]
The following legend is to be inserted in Global Securities deposited with or on
behalf of the Depositary:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
CUSIP NO.
$
ANACOMP, INC.
11-5/8% Senior Secured Note due 1999
Global Note No._______
ANACOMP, INC., a [Delaware] corporation, promises
to pay to __________________________________, or registered assigns,
the principal sum of _________________________ Dollars on September 30, 1999.
Interest Payment Dates: March 31 and September 30
Record Dates: March 15 and September 15
Additional provisions of this Security are set forth on the other side
of this Security.
ANACOMP, INC.
[Seal] by
----------------------------
Chairman of the Board and Chief
Executive Officer
<PAGE>
----------------------------
[Secretary]
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
----------------------------
Authorized Signatory
A-2
<PAGE>
[FORM OF REVERSE SIDE OF SECURITY]
11-5/8% Senior Secured Note due 1999
1. Interest
--------
ANACOMP, INC., a [Delaware] corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above. The Company will pay interest
semiannually on March 31 and September 30 (each an "Interest Payment Date") of
each year, commencing September 30, 1996. Interest on the Securities will
accrue from and including the most recent date to which interest has been paid
or, if no interest has been paid, from the date of this Security. Interest will
be computed on the basis of a 360-day year of twelve 30-day months. The Company
shall pay interest on overdue principal at the rate borne by the Securities plus
2% per annum, and it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
2. Method of Payment
-----------------
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the March 15 or September 15 immediately preceding the Interest
Payment Date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and
interest in money of the United States of America that at the time of payment is
legal tender for payment of public and private debts. However, the Company may
pay principal and interest by check payable in such money. It may mail an
interest check to a Holder's registered address.
3. Paying Agent and Registrar
--------------------------
Initially, The Bank of New York, a New York banking corporation
("Trustee"), will act as Paying Agent and Registrar. The Company may appoint
and change any Paying Agent, Registrar or co-registrar without notice. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar or co-registrar.
A-3
<PAGE>
4. Indenture; Collateral Documents
-------------------------------
The Company issued the Securities under an Indenture dated as of
_____________, 1996 ("Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
Section Section 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such
terms, and securityholders are referred to the Indenture and the Act for a
statement of those terms.
The Securities are secured obligations of the Company limited to
$___________ aggregate principal amount (subject to Section 2.9 of the
Indenture). The Indenture imposes certain limitations on the Company and the
Restricted Subsidiaries, including, subject to certain exceptions, limitations
on the Incurrence of Indebtedness, the payment of dividends on, and redemption
of, the Capital Stock of the Company and certain of its Subsidiaries, the
redemption of certain Subordinated Obligations of the Company and certain of its
Subsidiaries, the sale by the Company and certain of its Subsidiaries of assets
and certain Subsidiary stock, transactions with Affiliates, Liens on the
Collateral securing the Securities and consolidations and mergers and transfer
of all or substantially all the Company's and certain of its Subsidiaries'
assets. In addition, the Indenture limits the ability of the Company and
certain of its Subsidiaries to restrict distributions and dividends from such
Subsidiaries.
As provided in the Indenture, the Securities are secured by the Lien
of the Indenture and the other Collateral Documents in respect of the
Collateral. Each securityholder, by accepting a Security, shall be bound by and
entitled to the benefits of the Collateral Documents, as the same may be amended
from time to time pursuant to the provisions thereof and of the Indenture.
5. Optional Redemption
-------------------
The Company may redeem the Securities in whole at any time or in part
at any time and from time to time at a redemption price of 100% of the principal
amount thereof, plus accrued and unpaid interest (if any) to the date of
redemption subject to the right of Holders of record on the relevant record date
to receive interest due on the related interest payment date.
6. Mandatory Redemption
--------------------
The Company shall redeem Securities in the principal amounts and on
the dates set forth below at a redemption price of 100% of the principal amount,
plus accrued interest to the redemption date (subject to the right of Holders of
record on the relevant date to receive interest due on the related interest
payment date).
A-4
<PAGE>
September 30, 1996 $14,287,500
March 31, 1997 $14,287,500
September 30, 1997 $16,162,500
March 31, 1998 $16,162,500
September 30, 1998 $17,100,000
March 31, 1999 $17,100,000
September 30, 1999 Balance due
The Company may receive a credit against the principal amount of the
Securities required to be redeemed pursuant to this paragraph equal to the
principal amount (excluding premium) of any Securities that the Company has
acquired pursuant to a pro rata offer to the Holders of all the Securities or
redeemed other than pursuant to this paragraph and has delivered to the Trustee
for cancellation. Any such credit shall be applied against redemption payments
otherwise required under this paragraph 6 in the order of their maturity, except
that in the case of a credit for redemption of Securities pursuant to clause
(i)(y) of Section 4.7(f) of the Indenture, such credit shall be allocated pro
rata to reduce all mandatory redemption payments thereafter required under this
paragraph 6 and, in the case of credit for redemption of Securities pursuant to
clause (ii) of Section 4.7(f), 50% of such credit shall be applied against
redemption payments otherwise required under this paragraph 6 in the order of
their maturity and 50% of such credit shall be allocated pro rata to reduce all
mandatory redemption payments thereafter required by this paragraph 6. The
Company may receive the credit only once for any Security.
7. Notice of Redemption
--------------------
Notice of redemption will be mailed by first class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address; provided, however, that, in
-------- -------
the case of any mandatory redemption, notice of such redemption shall be given
as aforesaid at least five Business Days prior to the date fixed for redemption.
Securities in denominations larger than $1,000 may be redeemed in part but only
in whole multiples of $1,000. If money sufficient to pay the redemption price
of and accrued interest on all Securities (or portions thereof) to be redeemed
on the redemption date is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied, on and after such
date interest ceases to accrue on such Securities (or such portions thereof)
called for redemption.
8. Put Provisions
--------------
Upon the occurrence of a Change of Control, any Holder of Securities
will have the right to require the Company to repurchase all or any part of the
Securities of such Holder at a repurchase price equal to 100% of the principal
amount of the Securities to be repurchased plus accrued interest to the date of
repurchase (subject to the right of Holders of
A-5
<PAGE>
record on the relevant record date to receive interest due on the related
interest payment date) as provided in, and subject to the terms of, the
Indenture.
Under certain circumstances, any Holder of Securities will have the
right to require the Company to repurchase all or part of the Securities of such
Holder at a repurchase price equal to 100% of the principal amount of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date) from certain Net Cash
Proceeds of Asset Dispositions as provided in, and subject to the terms of, the
Indenture.
9. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
---------------------
The registered Holder of this Security may be treated as the owner of
it for all purposes.
11. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
12. Discharge
---------
Subject to certain conditions, the Company at any time may terminate
some of or all its obligations under the Securities and the Indenture if the
Company deposits with
A-6
<PAGE>
the Trustee money or U.S. Government Obligations for the payment of principal
and interest on the Securities to redemption or maturity, as the case may be.
13. Amendment; Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company and the Trustee may amend
the Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, to comply with Article 5 of the Indenture, to establish or
maintain the Lien of the Indenture and the other Collateral Documents as a
perfected first priority Lien of the Trustee in respect of the Collateral, to
correct or amplify the description of the Collateral subject to the Lien of the
Indenture or the other Collateral Documents, to subject additional property or
assets to the Lien of the Indenture or the other Collateral Documents, to
provide for uncertificated Securities in addition to or in place of certificated
Securities, to add Guarantees with respect to the Securities, to add additional
covenants or surrender rights and powers conferred on the Company, to comply
with any request of the SEC in connection with qualifying the Indenture under
the Act or to make any change that does not adversely affect the rights of any
Securityholder.
14. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest on the Securities; (ii) default in payment of principal
on the Securities at maturity, upon acceleration, redemption or otherwise, or
failure by the Company to redeem or Purchase Securities when required; (iii)
failure by the Company to comply with other agreements in the Indenture or the
Securities, in certain cases subject to notice and lapse of time; (iv) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Company if the amount accelerated (or so
unpaid) exceeds $5,000,000 at the time; (v) certain events of bankruptcy or
insolvency with respect to the Company and any Restricted Subsidiary; and (vi)
certain judgments or decrees for the payment of money in excess of $5,000,000.
If an Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the Securities may declare all the
Securities to be due and payable immediately. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Securities being due
and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of
A-7
<PAGE>
a majority in principal amount of the Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in the interest of the
Holders.
15. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
17. Authentication
--------------
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
-------------
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with rights of survivorship and not as
tenants in common), COST (= custodian), and U/G/M/A (= Uniform Gift to Minors
Act).
19. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the
A-8
<PAGE>
accuracy of such numbers either as printed on the Securities or as contained in
any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
20. GOVERNING LAW
-------------
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST
AND WITHOUT CHARGE TO THE SECURITYHOLDER A COPY OF THE INDENTURE WHICH HAS IN IT
THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
ANACOMP, INC.
[11550 NORTH MERIDIAN STREET
CARMEL, IN 46032]
ATTENTION OF CORPORATE COMMUNICATIONS
A-9
<PAGE>
- --------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ___________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date: _______________ Your Signature: _____________________
(Sign exactly as your name appears on the other side of this Security)
- --------------------------------------------------------------------------------
Signature
Guarantee:___________________________________________________________
(Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the
Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934.)
A-10
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.7 or 4.9 of the Indenture, check the box:
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.7 or 4.9 of the Indenture, state the amount:
$___________________________
Date: __________________ Your Signature:_______________________________________
(Sign exactly as your name appears
on the other side of the Security)
Signature
Guarantee:____________________________________________________________________
(Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the
Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934.)
A-11
<PAGE>
Schedule I
Indebtedness To Be Outstanding
------------------------------
Immediately After the Issue Date
--------------------------------
1. [L/C Facility]
<PAGE>
Schedule II to Indenture
Liens To be Outstanding Immediately After the Issue Date
--------------------------------------------------------
<PAGE>
Schedule III to Indenture
U.S. Restricted Subsidiaries
----------------------------
1. Florida AAC Corporation
<PAGE>
Schedule IV to Indenture
Jurisdictions for UCC Filings
-----------------------------
Debtor/Grantor Names Jurisdictions
- -------------------- -------------
1. Anacomp, Inc.
[others?]
<PAGE>
Schedule V to Indenture
Jurisdictions for Real Property Filings and Recordings
------------------------------------------------------
<PAGE>
Exhibit 4(b)
[Draft--4/26/96]
================================================================================
ANACOMP, INC.
13% SENIOR SUBORDINATED NOTES DUE 2002
----------------------------
INDENTURE
DATED AS OF , 1996
-------------------------
IBJ SCHRODER BANK & TRUST COMPANY,
TRUSTEE
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE....... 1
------------------------------------------
SECTION 1.1. Definitions........................ 1
SECTION 1.2. Other Definitions.................. 23
SECTION 1.3. Incorporation by Reference of Trust
Indenture Act...................... 23
SECTION 1.4. Rules of Construction.............. 24
ARTICLE 2
THE SECURITIES........... 24
--------------
SECTION 2.1. Form and Dating.................... 24
SECTION 2.2. Execution and Authentication....... 25
SECTION 2.3. Registrar and Paying Agent......... 26
SECTION 2.4. Paying Agent To Hold Money in Trust 26
SECTION 2.5. Securityholder Lists............... 26
SECTION 2.6. Transfer and Exchange.............. 27
SECTION 2.7. Replacement Securities............. 27
SECTION 2.8. Outstanding Securities............. 28
SECTION 2.9. Temporary Securities............... 28
SECTION 2.10. Cancellation....................... 29
SECTION 2.11. Defaulted Interest................. 29
SECTION 2.12. Record Date........................ 30
SECTION 2.13. CUSIP Numbers...................... 30
ARTICLE 3
REDEMPTION............. 30
----------
SECTION 3.1. Notices to Trustee.................. 30
SECTION 3.2. Selection of Securities To Be
Redeemed............................ 31
SECTION 3.3. Notice of Redemption................ 31
SECTION 3.4. Effect of Notice of Redemption...... 32
SECTION 3.5. Deposit of Redemption Price......... 32
SECTION 3.6. Securities Redeemed in Part......... 32
ARTICLE 4
COVENANTS............. 33
---------
SECTION 4.1. Payment of Securities............... 33
SECTION 4.2. SEC Reports......................... 33
SECTION 4.3. Limitation on Indebtedness.......... 34
SECTION 4.4. Limitation on Restricted Subsidiary
Indebtedness and Preferred Stock.... 37
SECTION 4.5. Limitation on Restricted Payments... 39
<PAGE>
SECTION 4.6. Limitation on Restrictions on
Distributions from Restricted
Subsidiaries........................ 42
SECTION 4.7. Limitation on Sales of Assets and
Restricted Subsidiary Stock......... 43
SECTION 4.8. Limitation on Transactions with
Affiliates.......................... 48
SECTION 4.9. Change of Control................... 49
SECTION 4.10. Compliance Certificate.............. 52
SECTION 4.11. Further Instruments and Acts........ 53
SECTION 4.12. Limitation on Liens................. 53
SECTION 4.13. Limitation on Sale/Leaseback
Transactions........................ 53
SECTION 4.14. Limitation on Issuance and Sale of
Capital Stock of Restricted
Subsidiaries........................ 53
SECTION 4.15. Restricted and Unrestricted
Subsidiaries........................ 54
SECTION 4.16. Revisions to Schedules.............. 55
SECTION 4.17. Maintenance of Properties; Insurance 55
SECTION 4.18. Corporate Existence................. 55
SECTION 4.19. Taxes............................... 56
SECTION 4.20. Conflicting Agreements.............. 56
ARTICLE 5
SUCCESSOR COMPANY............. 56
-----------------
ARTICLE 6
DEFAULTS AND REMEDIES.............. 58
---------------------
SECTION 6.1. Events of Default................... 58
SECTION 6.2. Acceleration........................ 60
SECTION 6.3. Other Remedies...................... 60
SECTION 6.4. Waiver of Past Defaults............. 61
SECTION 6.5. Control by Majority................. 61
SECTION 6.6. Limitation on Suits................. 61
SECTION 6.7. Rights of Holders To Receive Payment 62
SECTION 6.8. Collection Suit by Trustee.......... 62
SECTION 6.9. Trustee May File Proofs of Claim.... 62
SECTION 6.10. Priorities.......................... 63
SECTION 6.11. Undertaking for Costs............... 63
SECTION 6.12. Waiver of Stay or Extension Laws.... 63
ARTICLE 7
TRUSTEE............... 64
-------
SECTION 7.1. Duties of Trustee............... 64
-2-
<PAGE>
SECTION 7.2. Rights of Trustee................ 65
SECTION 7.3. Individual Rights of Trustee..... 65
SECTION 7.4. Trustee's Disclaimer............. 66
SECTION 7.5. Notice of Defaults............... 66
SECTION 7.6. Reports by Trustee to Holders.... 66
SECTION 7.7. Compensation and Indemnity....... 66
SECTION 7.8. Replacement of Trustee........... 67
SECTION 7.9. Successor Trustee by Merger...... 68
SECTION 7.10. Eligibility; Disqualification.... 69
SECTION 7.11. Preferential Collection of Claims
Against Company.................. 69
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE... 69
----------------------------------
SECTION 8.1. Discharge of Liability on Securities;
Defeasance........................... 69
SECTION 8.2. Conditions to Defeasance............. 70
SECTION 8.3. Application of Trust Money........... 71
SECTION 8.4. Repayment to Company................. 71
SECTION 8.5. Indemnity for Government Obligations. 72
SECTION 8.6. Reinstatement........................ 72
ARTICLE 9
SUBORDINATION............ 72
SECTION 9.1. Securities Subordinated to Senior
Indebtedness........................ 72
SECTION 9.2. No Payment on Securities in Certain
Circumstances....................... 73
SECTION 9.3. Securities Subordinated to Prior
Payment of All Senior Indebtedness
on Dissolution, Liquidation or
Reorganization of Company........... 74
SECTION 9.4. Securityholders To Be Subrogated to
Rights of Holders of Senior
Indebtedness........................ 76
SECTION 9.5. Obligations of the Company
Unconditional....................... 76
SECTION 9.6. Trustee and Paying Agent Entitled To
Assume Payments Not Prohibited
in Absence of Notice................ 77
SECTION 9.7. Application by Trustee of Monies
Deposited With It................... 77
SECTION 9.8. Subordination Rights Not Impaired by
Acts or Omissions of Company or
Holders of Senior Indebtedness...... 77
SECTION 9.9. Securityholders Authorize Trustee To
-3-
<PAGE>
Effectuate Subordination of
Securities.......................... 78
SECTION 9.10. Right of Trustee and Paying Agent To
Hold Senior Indebtedness............ 78
SECTION 9.11. Article 9 Not To Prevent Events of
Default............................. 79
SECTION 9.12. No Fiduciary Duty Created to Holders
of Senior Indebtedness.............. 79
ARTICLE 10
AMENDMENTS AND WAIVERS....... 79
----------------------
SECTION 10.1. Without Consent of Holders........... 79
SECTION 10.2. With Consent of Holders.............. 80
SECTION 10.3. Compliance with Trust Indenture Act.. 81
SECTION 10.4. Revocation and Effect of Consents and
Waivers.............................. 81
SECTION 10.5. Notation on or Exchange of
Securities........................... 81
SECTION 10.6. Trustee To Sign Amendments........... 81
SECTION 10.7. Payment for Consent.................. 82
ARTICLE 11
MISCELLANEOUS.............. 82
-------------
SECTION 11.1. Trust Indenture Act Controls......... 82
SECTION 11.2. Notices.............................. 82
SECTION 11.3. Communication by Holders with Other
Holders.............................. 83
SECTION 11.4. Certificate and Opinion as to
Conditions Precedent................. 83
SECTION 11.5. Statements Required in Certificate or
Opinion.............................. 83
SECTION 11.6. Rules by Trustee, Paying Agent and
Registrar............................ 84
SECTION 11.7. Legal Holidays........................ 84
SECTION 11.8. Governing Law......................... 84
SECTION 11.9. No Recourse Against Others............ 84
SECTION 11.10. Successors............................ 84
SECTION 11.11. Multiple Originals.................... 84
SECTION 11.12. Table of Contents; Headings........... 84
SECTION 11.13. Severability.......................... 85
Exhibit A - Form of Security
Schedule I - Indebtedness To Be Outstanding Immediately
After the Issue Date
-4-
<PAGE>
Schedule II - Liens To Be Outstanding Immediately After
the Issue Date
Schedule III - U.S. Restricted Subsidiaries
-5-
<PAGE>
INDENTURE dated as of ______________, 1996, between ANACOMP, INC., a
Delaware corporation (the "Company"), successor to Anacomp, Inc., an Indiana
corporation, and IBJ SCHRODER BANK & TRUST COMPANY, a New York banking
corporation (the "Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's 13% Senior
Subordinated Notes due 2002 (the "Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
------------------------------------------
SECTION 1.1. Definitions.
-----------
"Accrued Interest Securities" means any Securities issued in payment of
---------------------------
accrued interest on the Securities pursuant to the second paragraph of Section 2
of the Securities and the last paragraph of Section 2.1 of this Indenture, as
the same may be amended or supplemented from time to time in accordance with
their terms.
"Affiliate" of any specified Person means (i) any other Person,
---------
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person or (ii) any other Person who is a
director or officer (A) of such specified Person, (B) of any subsidiary of such
specified Person or (C) of any Person described in clause (i). For the purposes
of this definition, "control" when used with respect to any Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Notwithstanding the foregoing, each Unrestricted Subsidiary shall be deemed an
Affiliate of the Company and of each other Subsidiary of the Company.
"Asset Disposition" means any direct or indirect sale, lease, transfer,
-----------------
conveyance or other disposition (or series of related sales, leases, transfers,
conveyances or dispositions) of shares of Capital Stock of any Restricted
Subsidiary (other than directors' qualifying shares), property or other assets
(each referred to for the purposes of this definition as a "disposition") by the
Company or any Restricted Subsidiary (including any disposition by means of a
merger, consolidation or similar transaction), other than (i) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (ii) a disposition of the Company's or
any Restricted Subsidiary's accounts receivable, lease receivables or inventory
(other than the disposition of inventory pursuant to a Sale/Leaseback
<PAGE>
Transaction) at Fair Market Value in the Ordinary Course of Business, (iii) a
disposition of property or assets, whether in a single transaction or a series
of related transactions which constitute a single plan of disposition, that have
an aggregate Fair Market Value not in excess of $250,000, (iv) an operating
lease entered into in the ordinary course of business with respect to property,
plant or equipment that in the judgment of the Board of Directors constitutes
excess capacity or (v) a "like-kind exchange" of an asset in exchange for an
asset of a third party, so long as, in the judgment of the Company's Board of
Directors, the asset received by the Company or such Restricted Subsidiary in
such exchange (x) has a Fair Market Value at least equal to the fair market
value of the asset transferred by the Company or such Restricted Subsidiary and
(y) is usable in a Permitted Line of Business to at least the same extent as the
asset transferred by the Company or such Restricted Subsidiary. An Asset
Disposition shall include the requisition of title to, seizure of or forfeiture
of any property or assets, or any actual or constructive total loss or an agreed
or compromised total loss of any property or assets. The term "Asset
Disposition" when used with respect to the Company shall not include any
disposition pursuant to Article 5 which constitutes a disposition of all or
substantially all the assets of the Company.
"Attributable Indebtedness", in respect of a Sale/Leaseback
-------------------------
Transaction, means, as at the time of determination, the greater of (i) the Fair
Market Value of the property subject to such Sale/Leaseback Transaction (as
determined in good faith by the Board of Directors) or (ii) the present value
(discounted at the interest rate borne by the Securities, compounded annually)
of the total obligations of the lessee for rental payments during the remaining
term of the lease included in such Sale/Leaseback Transaction (including any
period for which such lease has been extended).
"Average Life" means, as of the date of determination, with respect to
------------
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of (a) the number of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock and (b) the
amount of such payment by (ii) the sum of all such payments.
"Board of Directors" means the Board of Directors of the Company or any
------------------
committee thereof duly authorized to act on behalf of such Board.
-2-
<PAGE>
"Board Resolution" means a duly adopted resolution of the Board of
----------------
Directors in full force and effect at the time of determination and certified as
such by the Secretary or an Assistant Secretary of the Company.
"Business Day" means each day which is not a Legal Holiday.
------------
"Capital Lease Obligations" means an obligation that is required to be
-------------------------
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP; the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests,
-------------
rights to purchase, warrants, options, participations or other equivalents of or
interests (including partnership interests) in (however designated) equity of
such Person, including any Preferred Stock, but excluding any debt securities
convertible into such equity.
"Change of Control" means the occurrence of any of the following
-----------------
events: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than an underwriter engaged in a firm commitment
underwriting in connection with a public offering of the Voting Stock of the
Company or a Restricted Subsidiary, is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person
shall be deemed to have "beneficial ownership" of all shares that any such
person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more than 50% of
the total voting power of the Voting Stock of the Company; (ii) during any
period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board or whose nomination for election by the
shareholders of the Company was approved by a vote of a majority of the
directors of the Company then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of such
Board then in office; or (iii) the Company, either individually or in
conjunction with one or more of its Subsidiaries, sells, conveys, leases or
otherwise transfers, or one or more of such Subsidiaries sell, convey, lease or
otherwise transfer, all or substantially all the assets of the Company and the
Restricted Subsidiaries, taken as a whole, to any Person (other than a
Restricted Subsidiary).
-3-
<PAGE>
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Commodity Price Protection Agreement" means, in respect of a Person,
------------------------------------
any forward contract, commodity swap agreement, commodity option agreement or
other similar agreement or arrangement designed to protect such Person against
fluctuations in commodity prices.
"Company" means the party named as such in this Indenture until a
-------
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Consolidated Coverage Ratio" means, as of any date of determination,
---------------------------
the ratio of (i) the aggregate amount of EBITDA for the period of [the most
recent four consecutive fiscal quarters] ending at least 45 days prior to the
date of such determination to (ii) Consolidated Interest Expense for such [four
fiscal quarters]; provided, however, that (1) if the Company or any Restricted
-------- -------
Subsidiary has Incurred any Indebtedness since the beginning of such period that
remains outstanding or if the transaction giving rise to the need to calculate
the Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both,
EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving effect on a pro forma basis to such Indebtedness as if such
--- -----
Indebtedness had been Incurred on the first day of such period and the discharge
of any other Indebtedness repaid, repurchased, defeased or otherwise discharged
with the proceeds of such new Indebtedness as if such discharge had occurred on
the first day of such period, (2) if since the beginning of such period the
Company or any Restricted Subsidiary shall have made any Asset Disposition or if
the transaction giving rise to the need to calculate the Consolidated Coverage
Ratio is an Asset Disposition, or both, EBITDA for such period shall be reduced
by an amount equal to EBITDA (if positive) directly attributable to the property
or assets which are the subject of such Asset Disposition for such period, or
increased by an amount equal to EBITDA (if negative) directly attributable
thereto for such period and Consolidated Interest Expense for such period shall
be reduced by an amount equal to the Consolidated Interest Expense directly
attributable to any Indebtedness of the Company or any Restricted Subsidiary
repaid, repurchased, defeased or otherwise discharged with respect to the
Company and the continuing Restricted Subsidiaries in connection with such Asset
Dispositions for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted Subsidiary to the extent the
Company and the continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale), (3) if since the beginning of such period the
-4-
<PAGE>
Company or any Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any acquisition of
assets occurring in connection with a transaction causing a calculation to be
made hereunder, which constitutes all or substantially all of an operating unit
of a business, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto (including the Incurrence of
--- -----
any Indebtedness) as if such Investment or acquisition occurred on the first day
of such period and (4) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period) shall
have made any Asset Disposition or any Investment that would have required an
adjustment pursuant to clause (2) or (3) above if made by the Company or a
Restricted Subsidiary during such period, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
--- -----
thereto as if such Asset Disposition or Investment occurred on the first day of
such period. For purposes of this definition, whenever pro forma effect is to
--- -----
be given to an acquisition of assets, the amount of income or earnings relating
thereto and the amount of Consolidated Interest Expense associated with any
Indebtedness Incurred in connection therewith, the pro forma calculations shall
--- -----
be determined in good faith by a responsible financial or accounting Officer of
the Company and as further contemplated by the definition of pro forma. If any
--- -----
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest expense on such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for the
entire period (taking into account any Interest Rate Protection Agreement
applicable to such Indebtedness if such Interest Rate Protection Agreement has a
remaining term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the sum of (i)
-----------------------------
the total cash and noncash interest expense of the Company and its consolidated
Subsidiaries, plus, to the extent not included in such interest expense, (A)
interest expense attributable to Capital Lease Obligations, (B) amortization of
debt discount and debt issuance cost, (C) capitalized interest, (D) accrued
interest, (E) commissions, discounts and other fees and charges paid or owed
with respect to letters of credit and bankers' acceptance financing, (F)
interest actually paid by the Company or any such Subsidiary under any Guarantee
of Indebtedness or other obligation of any other Person, (G) net costs
associated with Hedging Obligations (including amortization of discounts and
fees), (H) the interest portion of any deferred obligation, (I) Preferred Stock
dividends in respect of all Preferred Stock of Subsidiaries of the Company and
Redeemable Stock of the Company held by Persons other than the Company or a
Wholly Owned Subsidiary and (J) cash
-5-
<PAGE>
contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or fees
to any Person (other than the Company) in connection with Indebtedness Incurred
by such plan or trust (provided, however, that there shall be excluded from this
-------- -------
clause (i), (x) any such interest expense of any Unrestricted Subsidiary to the
extent the related Indebtedness is not Guaranteed or paid by the Company or any
Restricted Subsidiary and (y) any such interest expense attributable to original
issue discount as a result of Fresh Start Accounting adjustments), less (ii) to
the extent included in clause (i), amortization or write-off of deferred
financing costs of the Company and its consolidated Subsidiaries during such
period and any charge related to any premium or penalty paid in connection with
redeeming or retiring any Indebtedness of the Company and its consolidated
Subsidiaries prior to its Stated Maturity.
"Consolidated Net Income" means, for any period, the net income (loss)
-----------------------
of the Company and its consolidated Subsidiaries for such period determined in
accordance with GAAP but excluding for such purpose the impact of any Fresh
Start Accounting adjustment; provided, however, that there shall not be included
-------- -------
in such Consolidated Net Income (i) any net income (loss) of any Person if such
Person is not a Restricted Subsidiary, except that (A) subject to the
limitations contained in (iv) below, the Company's equity in the net income of
any such Person for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such Person
during such period to the Company or a Restricted Subsidiary as a dividend or
other distribution (subject, in the case of a dividend or other distribution to
a Restricted Subsidiary, to the limitations contained in clause (iii) below) and
(B) the Company's equity in a net loss of any such Person (other than an
Unrestricted Subsidiary) for such period shall be included in determining such
Consolidated Net Income, (ii) any net income (loss) of any person acquired by
the Company or a Restricted Subsidiary in a pooling of interests transaction for
any period prior to the date of such acquisition, (iii) any net income (loss) of
any Restricted Subsidiary if such Restricted Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the making
of distributions by such Restricted Subsidiary, directly or indirectly, to the
Company, except that (A) subject to the limitations contained in (iv) below, the
Company's equity in the net income of any such Restricted Subsidiary for such
period shall be included in such Consolidated Net Income up to the aggregate
amount of cash that could have been distributed by such Restricted Subsidiary
during such period to the Company or another Restricted Subsidiary as a dividend
(subject, in the case of a dividend to another Restricted Subsidiary, to the
limitation contained in this clause) and (B) the Company's equity in a net loss
of any such Restricted Subsidiary for such period shall be included in
-6-
<PAGE>
determining such Consolidated Net Income, (iv) any gain (but not loss) realized
upon the sale or other disposition of any property, plant or equipment of the
Company or its consolidated Subsidiaries (including pursuant to any
Sale/Leaseback Transaction) which is not sold or otherwise disposed of in the
ordinary course of business, (v) any gain (but not loss) realized upon the sale
or other disposition of any Capital Stock of any Person, (vi) any extraordinary
gain or loss, (vii) the cumulative effect of a change in accounting principles
and (viii) any non-recurring restructuring charges for any fiscal quarter in the
fiscal year of the Company commencing October 1, 1995.
["Consolidated Tangible Net Worth" means the amount by which (i) the
-------------------------------
total of the amounts shown on the balance sheet of the Company and its
consolidated Subsidiaries, determined on a consolidated basis in accordance with
GAAP, as of the end of the most recent fiscal quarter of the Company ending at
least 45 days prior to the taking of any action for the purpose of which the
determination is being made, as (x) the par or stated value of all outstanding
Capital Stock of the Company plus (y) paid-in capital or capital surplus
relating to such Capital Stock plus (z) any retained earnings or earned surplus
exceeds (ii) the sum of (A) any accumulated deficit, (B) any amounts
attributable to Disqualified Stock, (C) the amounts appearing on the assets side
of such balance sheet for all contracts, patents, trademarks, copyrights and
other intellectual property rights, franchises, licenses, goodwill, treasury
stock, unamortized debt discount and expense and similar intangibles, (D) any
increase in the amount of capitalized research and development and capitalized
interest subsequent to the Issue Date, and (E) the amount of any write-up
subsequent to the Issue Date in the book value of any asset owned on the Issue
Date resulting from the revaluation thereof subsequent to such date, or any
write-up in excess of the cost of any asset acquired subsequent to that date.]
"Currency Exchange Protection Agreement" means, in respect of any
--------------------------------------
Person, any foreign exchange contract, currency swap agreement, currency option
or other similar agreement or arrangement designed to protect such Person
against fluctuations in foreign currency exchange rates.
"Default" means any event which is, or after notice or passage of time
-------
or both would be, an Event of Default.
"Disqualified Stock" of a Person means Redeemable Stock of such Person
------------------
as to which the maturity, mandatory redemption, conversion or exchange or
redemption at the option of the Holder thereof occurs, or may occur, on or prior
to the first anniversary of the Stated Maturity of the Securities.
"Dollar Equivalent" means, with respect to any monetary amount in a
-----------------
currency other than U.S. dollars, at any
-7-
<PAGE>
time for the determination thereof, the amount of U.S. dollars obtained by
converting such foreign currency involved in such computation into U.S. dollars
at the spot rate for the purchase of U.S. dollars with the applicable foreign
currency as quoted by _________________ in New York City at approximately 11:00
a.m. (New York time) on the date two Business Days prior to such determination.
"EBITDA" for any period means the Consolidated Net Income for such
------
period, plus, to the extent deducted in calculating such Consolidated Net
Income, (i) income tax expense, (ii) Consolidated Interest Expense, (iii)
depreciation expense, (iv) amortization expense and (v) any charge related to
any premium or penalty paid in connection with redeeming or retiring any
Indebtedness prior to its Stated Maturity, in each case for such period.
"Exchange Act" means the Securities Exchange Act of 1934.
------------
"Fair Market Value" means, with respect to any asset or property, the
-----------------
price which could be negotiated in an arm's-length free market transaction, for
cash, between a willing seller and a willing buyer, neither of whom is under
undue pressure or compulsion to complete the transaction; provided, that the
--------
foregoing shall not prohibit sales of inventory at a discount or on terms which
are typical in the industry to which such inventory relates. Fair Market Value
shall be determined, except as otherwise provided herein, (i) if such property
or asset has a Fair Market Value less than $5,000,000, by two officers of the
Company in an Officers' Certificate delivered to the Trustee or (ii) if such
property or asset has a Fair Market Value in excess of $5,000,000, by the Board
of Directors as a whole and evidenced by a Board Resolution, dated within 30
days of the relevant transaction, of the Board of Directors delivered to the
Trustee.
"Foreign Asset Disposition" means an Asset Disposition in respect of
-------------------------
Capital Stock or assets of a Restricted Subsidiary of the type described in
Section 936 of the Code to the extent that the proceeds of such Asset
Disposition are received by a Person subject in respect of such proceeds to the
tax laws of a jurisdiction other than the United States of America, any State
thereof or the District of Columbia.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary that is
-----------------------------
incorporated in a jurisdiction other than the United States of America, any
State thereof or the District of Columbia.
-8-
<PAGE>
"Fresh Start Accounting" means Fresh Start Accounting as described in
----------------------
Statement of Position 90-7, "Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code" (Am. Inst. of Certified Public Accountants 1990), as
then in effect, or any comparable statement then in effect.
"GAAP" means generally accepted accounting principles in the United
----
States of America as in effect as of the Issue Date, including those set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained in
this Indenture shall be computed in conformity with GAAP consistently applied,
except as otherwise expressly provided in this Indenture.
"Guarantee" means any obligation, contingent or otherwise, of any
---------
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or by agreement
to keepwell, to purchase assets, goods, securities or services, to take-or-pay
or to maintain financial statement conditions or otherwise) or (ii) entered into
for purposes of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided, however, that the term
-------- -------
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Hedging Obligations" of any Person means the obligations of such
-------------------
Person pursuant to any Interest Rate Protection Agreement, Commodity Price
Protection Agreement or Currency Exchange Protection Agreement or other similar
agreement or arrangement.
"Holder" or "Securityholder" means the Person in whose name a Security
------ --------------
is registered on the Registrar's books.
"Incur" means to, directly or indirectly, create, issue, assume,
-----
Guarantee, incur (by conversion, exchange or otherwise) extend, assume, or
otherwise become liable for, contingently or otherwise; provided, however, that
-------- -------
any Indebtedness or Capital Stock of a Person existing at the time such Person
becomes a Subsidiary (whether by merger, consolidation, acquisition or
otherwise) will be deemed to be
-9-
<PAGE>
incurred by such Subsidiary at the time it becomes a Subsidiary. The terms
"Incurrence", "Incurred" and "Incurring" shall each have a correlative meaning.
"Indebtedness" means, with respect to any Person on any date of
------------
determination (without duplication),
(i) the principal of and premium (if any) in respect of indebtedness
of such Person for borrowed money;
(ii) the principal of and premium (if any) in respect of obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments;
(iii) all Capital Lease Obligations and all Attributable Indebtedness
of such Person;
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except (A) Trade Payables and (B)
any obligation to pay any portion of such purchase price that becomes due
only if the earnings attributable to such property or services satisfy
predetermined minimum amounts subsequent to the purchase of such property
or services and the amount of such obligation cannot be determined on the
date of such purchase);
(v) all obligations of such Person in respect of letters of credit,
banker's acceptances or other similar instruments or credit transactions
(including reimbursement obligations with respect thereto), other than
obligations with respect to letters of credit securing obligations (other
than obligations described in (i) through (iv) above) entered into in the
ordinary course of business of such Person to the extent such letters of
credit are not drawn upon or, if and to the extent drawn upon, such drawing
is reimbursed no later than the third Business Day following receipt by
such Person of a demand for reimbursement following payment on any such
letter of credit;
(vi) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or,
with respect to any Subsidiary of such Person, any Preferred Stock (but
excluding, in each case, any accrued dividends);
(vii) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person;
provided, however, that the amount of such Indebtedness shall be the lesser
-------- -------
of (A) the Fair Market Value of such asset at such date of
-10-
<PAGE>
determination and (B) the amount of such Indebtedness of such other
Persons;
(viii) all Indebtedness of other Persons to the extent Guaranteed by
such Person; and
(ix) to the extent not otherwise included in this definition,
obligations of such Person in respect of Hedging Obligations.
For purposes of this definition, the maximum fixed redemption, repayment or
repurchase price of any Disqualified Stock or Preferred Stock that does not have
a fixed redemption, repayment or repurchase price shall be calculated in
accordance with the terms of such Stock as if such Stock were redeemed, repaid
or repurchased on any date on which Indebtedness shall be required to be
determined pursuant to the Indenture; provided, however, that if such Stock is
-------- -------
not then permitted to be redeemed, repaid or repurchased, the redemption,
repayment or repurchase price shall be the book value of such Stock as reflected
in the most recent financial statements of such Person. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations at such date.
"Indenture" means this instrument as originally executed or as it may
---------
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the TIA that are deemed to be a part of and govern
this instrument, and any such supplemental indenture, respectively.
"Indenture Obligations" means the obligations of the Company (and any
---------------------
other obligor hereunder or under the Securities) to pay principal of, and
premium, if any, and interest (including, without limitation, any default
interest) on, the Securities when due and payable, whether at maturity, by
acceleration, call for redemption or repurchase, in each case as required
hereunder, and all other amounts due or to become due under or in connection
with this Indenture and the Securities and the performance of all other
obligations to the Trustee and the Holders under this Indenture and the
Securities, according to the terms hereof and thereof.
"Interest Rate Protection Agreement" means, in respect of any Person,
----------------------------------
any interest rate swap agreement, interest rate option agreement, interest rate
cap agreement, interest rate collar agreement, interest rate floor agreement or
other similar
-11-
<PAGE>
agreement or arrangement designed to protect such Person against fluctuations in
interest rates.
"Investment" in any Person means any direct or indirect advance, loan
----------
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person) or other
extension of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of others)
such Person, or any purchase or acquisition of all or substantially all the
business or assets of, Capital Stock, Indebtedness, any other evidence of
beneficial ownership or other similar instruments issued by, such Person. For
purposes of Sections 4.5 and 4.15, (i) the term "Investment" shall include the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the Fair Market Value of the net assets of any Subsidiary of the Company at the
time that such Subsidiary is designated an Unrestricted Subsidiary; provided,
--------
however, that upon a redesignation of such Subsidiary as a Restricted
- -------
Subsidiary, the Company shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to
(x) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the Fair Market Value of the net assets of such
Subsidiary at the time that such Subsidiary is so re-designated as a Restricted
Subsidiary; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its Fair Market Value at the time of such
transfer. In determining the amount of any Investment in respect of any
property or asset other than cash, such property or asset shall be valued at its
Fair Market Value at the time of such Investment (unless otherwise specified in
this definition).
"Issue Date" means the first date on which Securities are issued
----------
pursuant to this Indenture.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
----
assignment, deposit arrangement, preference, priority, security interest,
encumbrance, easement, restriction, covenant, right-of-way, servitude, lien
(statutory or otherwise), charge, other security or similar agreement or
preferential arrangement of any kind or nature whatsoever or other adverse claim
of any kind or nature (including, without limitation, any conditional sale or
other title retention agreement or lease having substantially the same economic
effect of any of the foregoing).
"Magnetics Division" means the property and assets of the Company or
------------------
any Restricted Subsidiary used in connection with
-12-
<PAGE>
the manufacture, marketing and sale of magnetic tape, computer tape or other
magnetic products.
"Net Cash Proceeds" from an Asset Disposition means the sum of (i) cash
-----------------
payments and Temporary Cash Investments received (including any cash payments
received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when received, but
excluding any other consideration received in the form of assumption by the
acquiring person of Indebtedness or other obligations relating to such
properties or assets or received in any other non-cash form) therefrom and (ii)
the Fair Market Value of all securities issued to the Company or a Subsidiary of
the Company in connection therewith, in each case net of (A) all legal, title
and recording tax expenses, commissions and other fees and expenses incurred,
and all Federal, state, provincial, foreign and local taxes required to be paid
or accrued as a liability under GAAP as a consequence of such Asset Disposition,
(B) all payments made on any Indebtedness which is secured by any property or
assets subject to such Asset Disposition, in accordance with the terms of any
Lien upon such property or assets, or which must by its terms, or in order to
obtain a necessary consent to such Asset Disposition, or by applicable law, be
repaid out of the proceeds from such Asset Disposition, (C) all distributions
and other payments required to be made to minority interest Holders in
Subsidiaries or joint ventures as a result of such Asset Disposition and (D) the
deduction of appropriate amounts to be provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the property or
assets disposed of in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition; provided, that, in the event
--------
that any consideration for such Asset Disposition (which would otherwise
constitute Net Cash Proceeds) is required to be held in escrow pending
determination of whether a purchase price adjustment shall be made, such
consideration (or any portion thereof) shall become Net Cash Proceeds only at
such time as it is released to the Company or any Restricted Subsidiary from
escrow; provided, further, that any non-cash consideration received in
-------- -------
connection with such Asset Disposition, which is subsequently converted to cash,
shall be deemed to be Net Cash Proceeds at such time and shall thereafter be
applied in accordance with Section 4.7. The term "Net Cash Proceeds" from an
issuance or sale of Capital Stock means the cash proceeds of such issuance or
sale, net of attorneys' fees, accountants' fees, underwriters' or placement
agents' fees, discounts or commissions and brokerage, consultant and other fees
actually incurred in connection with such issuance or sale and net of taxes paid
or payable as a result thereof.
"Officer" means the Chairman of the Board and Chief Executive Officer,
-------
the President and Chief Operating Officer,
-13-
<PAGE>
the Vice President and Chief Administrative Officer, any other Vice President,
the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers at
---------------------
least one of whom shall be the principal executive officer, principal accounting
officer or principal financial officer of the Company.
"Opinion of Counsel" means a written opinion, in form acceptable to the
------------------
Trustee, from legal counsel who is acceptable to the Trustee. The counsel may
be an employee of or counsel to the Company or the Trustee.
"Ordinary Course of Business" means sales or assignments of inventory
---------------------------
or accounts receivable or the performance of services at Fair Market Value or
the collection of accounts receivable in the ordinary course of business and
does not include any sale, assignment or collection after the voluntary or
involuntary bankruptcy of the Company, including, without limitation, those
events of the type described in Section 6.1(8) and (9). The ordinary course of
business shall include (i) sales of inventory to customers, (ii) returns of
merchandise to manufacturers or distributors for refunds or credit and (iii)
exchanges of inventory with manufacturers or distributors for other inventory.
"pari passu," as applied to the ranking of any Indebtedness of a Person
----------
in relation to other Indebtedness of such Person, means that each such
Indebtedness either (i) is not subordinate in right of payment to any
Indebtedness or (ii) is subordinate in right of payment to the same Indebtedness
as is the other; and is so subordinate to the same extent, and is not
subordinate in right of payment to each other or to any Indebtedness as to which
the other is not so subordinate.
"Permitted Investment" means an Investment by the Company or any
--------------------
Restricted Subsidiary in (i) a Wholly Owned Subsidiary (including any Person
which will become a Wholly Owned Subsidiary as a result of such Investment) or
any Person that is merged or consolidated with or into, or transfers or coveys
all or substantially all of its business or assets to, the Company or any Wholly
Owned Subsidiary at the time such Investment is made; (ii) Temporary Cash
Investments; (iii) receivables owing to the Company or such Restricted
Subsidiary, if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms; provided,
--------
however, that nothing in this paragraph shall limit in any way the ability of
- -------
the Company or such Restricted Subsidiary to settle, compromise or otherwise
deal with such receivables in the ordinary course of business; (iv) payroll,
travel and similar advances to cover matters that are expected at the time of
such advances ultimately to be treated as expenses for accounting purposes and
that are made in the
-14-
<PAGE>
ordinary course of business; (v) loans or advances, in the aggregate principal
amount of $[6,000,000] outstanding from time to time, to employees of the
Company or such Restricted Subsidiary made in the ordinary course of business
consistent with past practices of the Company or such Restricted Subsidiary, as
the case may be; (vi) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to the Company or
such Restricted Subsidiary or in satisfaction of judgments; (vii) joint
ventures, whether in the form of cash or through a contribution of assets (the
nature of which, if other than cash, to be determined in good faith by the Board
of Directors, whose determination shall be evidenced by a Board Resolution
delivered to the Trustee) in an amount not to exceed $10,000,000 at any one
time; (viii) any other property, asset or Person if made pursuant to any written
agreement of the Company or such Restricted Subsidiary in effect on the Issue
Date; and (ix) Investments made as a result of the receipt of non-cash
consideration from an Asset Disposition that was made pursuant to and in
compliance with the provisions of Section 4.7 or a disposition of assets
pursuant to and in compliance with the provisions of Article 5 hereof.
"Permitted Liens" means (i) pledges or deposits by the Company or any
---------------
Restricted Subsidiary under workmen's compensation laws, unemployment insurance
laws, other types of social security benefits or similar legislation, or good
faith deposits in connection with bids, tenders or contracts (other than for the
payment of Indebtedness) or leases to which the Company or any Restricted
Subsidiary is a party, or deposits to secure public or statutory obligations or
deposits of cash or United States government bonds to secure surety or appeal
bonds to which the Company or any Restricted Subsidiary is a party, or deposits
as security for contested taxes or import duties or for the payment of rent, in
each case incurred by the Company or any Restricted Subsidiary in the ordinary
course of business consistent with past practice; (ii) Liens imposed by law,
such as carriers', warehousemen's and mechanics Liens, in each case for sums not
yet due from the Company or any Restricted Subsidiary or being contested in good
faith by appropriate proceedings by the Company or any Restricted Subsidiary, as
the case may be, or other Liens arising out of judgments or awards against the
Company or any Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary, as the case may be, shall then be prosecuting an appeal
or other proceedings for review; (iii) Liens for property taxes or other taxes,
assessments or governmental charges of the Company or any Restricted Subsidiary
not yet due or payable or subject to penalties for nonpayment or which are being
contested by the Company or such Restricted Subsidiary, as the case may be, in
good faith by appropriate proceedings; (iv) Liens in favor of issuers of standby
letters of credit, performance bonds and surety bonds issued pursuant to Section
4.3(b)(viii)(B) or
-15-
<PAGE>
Section 4.4(b)(iii)(B); (v) survey exceptions, encumbrances, easements or
reservations of, or rights of others for, licenses, rights-of-way, sewers,
electric lines, telegraph and telephone lines and other similar purposes or
zoning or other restrictions as to the use of real property of the Company or
any Restricted Subsidiary incidental to the ordinary course of conduct of the
business of the Company or such Restricted Subsidiary or as to the ownership of
properties of the Company or any Restricted Subsidiary, which, in either case,
were not incurred in connection with Indebtedness and which do not in the
aggregate materially adversely affect the value of said properties or materially
impair their use in the operation of the business of the Company or any
Restricted Subsidiary; (vi) Liens to secure Indebtedness permitted under Section
4.3(b)(i) and Section 4.4(b)(vi); (vii) Liens outstanding immediately after the
Issue Date as set forth on Schedule II hereto (and not otherwise permitted by
clause (vi)); (viii) Liens on property, assets or shares of stock of any
Restricted Subsidiary at the time such Restricted Subsidiary became a Subsidiary
of the Company; provided, however, that (A) if any such Lien shall have been
-------- -------
Incurred in anticipation of such transaction, such property, assets or shares of
stock subject to such Lien shall have a Fair Market Value at the date of the
acquisition thereof not in excess of the lesser of (1) the aggregate purchase
price paid or owed by the Company in connection with the acquisition of such
Restricted Subsidiary and (2) the Fair Market Value of all property and assets
of such Restricted Subsidiary and (B) any such Lien shall not extend to any
other property or assets owned by the Company or any Restricted Subsidiary; (ix)
Liens on property or assets at the time the Company or any Restricted Subsidiary
acquired such property or assets, including any acquisition by means of a merger
or consolidation with or into the Company or such Restricted Subsidiary;
provided, however, that (A) if any such Lien shall have been incurred in
- -------- -------
anticipation of such transaction, such property or assets subject to such Lien
shall have a Fair Market Value at the date of the acquisition thereof not in
excess of the lesser of (1) the aggregate purchase price paid or owed by the
Company or such Restricted Subsidiary in connection with the acquisition thereof
and of any other property and assets acquired simultaneously therewith and (2)
the Fair Market Value of all such property and assets acquired by the Company or
such Restricted Subsidiary and (B) any such Lien shall not extend to any other
property or assets owned by the Company or any Restricted Subsidiary; (x) Liens
securing Indebtedness or other obligations of a Restricted Subsidiary owing to
the Company or a Wholly Owned Subsidiary; (xi) Liens to secure any extension,
renewal, refinancing, replacement or refunding (or successive extensions,
renewals, refinancings, replacements or refundings), in whole or in
part, of any Indebtedness secured by Liens referred to in any of clauses (vii),
(viii) and (ix); provided, however, that any such Lien will be limited to all or
-------- -------
part of the same property or assets that secured the original Lien (plus
improvements on such
-16-
<PAGE>
property) and the aggregate principal amount of Indebtedness that is secured by
such Lien will not be increased to an amount greater than the sum of (A) the
outstanding principal amount, or, if greater, the committed amount, of the
Indebtedness described under clauses (vii), (viii) and (ix) at the time the
original Lien became a Permitted Lien under the Indenture and (B) an amount
necessary to pay any premiums, fees and other expenses Incurred by the Company
in connection with such refinancing, refunding, extension, renewal or
replacement; (xii) Liens on property or assets of the Company securing Hedging
Obligations so long as the related Indebtedness is, and is permitted to be under
Section 4.3(b), secured by a Lien on the same property securing the relevant
Hedging Obligation; (xiii) Liens securing Indebtedness incurred under (A) in the
case of the Company, any revolving credit facility; provided, that such
--------
Indebtedness constitutes Senior Debt permitted hereunder and such Liens relate
only to accounts receivable, inventory and proceeds thereof (other than proceeds
from the disposition of inventory pursuant to any Sale/Leaseback Transaction);
and (B) in the case of any Foreign Restricted Subsidiary, any foreign currency
revolving credit facility; provided, that such Indebtedness was incurred in
--------
compliance with Section 4.4(b)(ii) and such Liens relate only to the accounts
receivable, inventory and proceeds thereof of such Foreign Restricted Subsidiary
(other than proceeds from the disposition of inventory pursuant to any
Sale/Leaseback Transaction); and (xiv) Liens on property or assets of the
Company or any Restricted Subsidiary securing Indebtedness (1) under Purchase
Money Indebtedness or Capital Lease Obligations permitted under, in the case of
the Company, Section 4.3(b)(vii) and, in the case of such Restricted Subsidiary,
Section 4.4(b)(ii) or (2) under Sale/Leaseback Transactions permitted under
Section 4.13; provided, that (A) the amount of Indebtedness Incurred in any
--------
specific case does not, at the time such Indebtedness is Incurred, exceed the
lesser of the cost or Fair Market Value of the property or asset acquired or
constructed in connection with such Purchase Money Indebtedness or Capital Lease
Obligation or subject to such Sale/Leaseback Transaction, as the case may be,
(B) such Lien shall attach to such property or asset upon acquisition of such
property or asset and or upon commencement of such Sale/Leaseback Transaction,
as the case may be, and (C) no property or asset of the Company or any
Restricted Subsidiary (other than the property or asset acquired or contracted
in connection with such Purchase Money Indebtedness or Capital Lease Obligation
or subject to such Sale/Leaseback Transaction, as the case may be) are subject
to any Lien securing such Indebtedness.
"Permitted Line of Business" means (i) the line or lines of business in
--------------------------
which the Company or any of its Subsidiaries is engaged on the Issue Date and
(ii) a line or lines of business similar or related to the line or lines of
business described in the foregoing clause (i).
-17-
<PAGE>
"Person" means any individual, corporation, limited liability company,
------
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock," as applied to the Capital Stock of any corporation,
---------------
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a Security means the principal of the Security plus the
---------
premium, if any, payable on the Security which is due or overdue or is to become
due at the relevant time.
"pro forma" means, with respect to any calculation made or required to
--- -----
be made pursuant to the terms hereof, a calculation in accordance with Article
11 of Regulation S-X promulgated under the Securities Act (to the extent
applicable), as interpreted in good faith by the Board of Directors after
consultation with the independent certified public accountants of the Company,
or otherwise a calculation made in good faith by the Board of Directors after
consultation with the independent certified public accountants of the Company,
as the case may be.
"Purchase Money Indebtedness" means, with respect to any Person, all
---------------------------
obligations of such Person (i) consisting of the deferred purchase price of any
property or assets, conditional sale obligations, obligations under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business) and other purchase money obligations, in each case
where the maturity of such obligation does not exceed the anticipated useful
life of the property or asset being financed, (ii) Incurred to finance the
acquisition or construction of any property or asset and (iii) Incurred to
finance the acquisition of 100% of the Capital Stock (other than directors'
qualifying shares) of any other Person.
"Redeemable Stock" means, with respect to any Person, any Capital Stock
----------------
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or otherwise (including, without limitation,
upon the happening of any event) (i) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise, (ii) is convertible into or
exchangeable for Indebtedness (other than Preferred Stock) or Disqualified Stock
or (iii) is redeemable at the option of the Holder thereof, in whole or in part.
-18-
<PAGE>
["Reference Bank" means a leading bank (i) engaged in transactions in
--------------
Eurodollar deposits in the international Eurocurrency market, (ii) not an
Affiliate of the Trustee and (iii) having an established place of business in
London.]
"Refinancing Indebtedness" means Indebtedness that refunds, refinances,
------------------------
replaces, renews, repays or extends (including pursuant to any defeasance or
discharge mechanism) (collectively, "refinances," "refinancing" and "refinanced"
shall have a correlative meaning) any Indebtedness (including Indebtedness of
the Company that refinances Indebtedness of any Restricted Subsidiary and
Indebtedness of any Restricted Subsidiary that refinances Indebtedness of
another Restricted Subsidiary), including Indebtedness that refinances
Refinancing Indebtedness; provided, that (i) the Refinancing Indebtedness has a
--------
Stated Maturity no earlier than the Stated Maturity of the Indebtedness being
refinanced, (ii) the Refinancing Indebtedness has an Average Life at the time
such Refinancing Indebtedness is Incurred that is equal to or greater than the
Average Life of the Indebtedness being refinanced and (iii) such Refinancing
Indebtedness is Incurred in an aggregate principal amount (or if issued with
original issue discount, an aggregate issue price) that is equal to or less than
the sum of (A) the aggregate principal amount (or if issued with original issue
discount, the aggregate accreted value) then outstanding of the Indebtedness
being refinanced and (B) any premiums, fees and other expenses paid by the
Company or the Restricted Subsidiary, as the case may be, in connection with
such refinancing; provided, further, that Refinancing Indebtedness shall not
-------- -------
include (x) Indebtedness of a Subsidiary of the Company that refinances
Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted
Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; provided,
--------
further, that the covenants relating to the Refinancing Indebtedness are no more
- -------
restrictive in the aggregate than those of the Indebtedness being refinanced
and, if the Indebtedness being refinanced is subordinated to the Securities, the
Refinancing Indebtedness is at least as subordinated to the Securities as the
Indebtedness being refinanced.
"Restricted Subsidiary" means any Subsidiary of the Company other than
---------------------
an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property
--------------------------
now owned or hereafter acquired whereby pursuant to a direct or indirect
arrangement the Company or any Restricted Subsidiary of the Company transfers
such property to a Person and the Company or such Restricted Subsidiary leases
it from such Person.
"SEC" means the Securities and Exchange Commission.
---
-19-
<PAGE>
"Securities" means the Securities issued under this Indenture
----------
(including any Accrued Interest Securities).
"Securities Act" means the Securities Act of 1933.
--------------
"Senior Indenture" means the Indenture, dated as of _______________,
----------------
1996, between the Company and The Bank of New York, as Trustee, as the same may
be amended, supplemented or modified in accordance with its terms.
"Senior Indebtedness" means the principal of, interest (including,
-------------------
without limitation, interest at the contract rate relating to such Senior
Indebtedness accruing after any proceeding or event referred to in clauses (8)
and (9) of Section 6.1) on, or any other amounts due with respect to, (i) the
Senior Secured Notes, (ii) any Refinancing Indebtedness Incurred in respect of
the Senior Secured Notes or in respect of any previous Refinancing Indebtedness
Incurred in respect of such Notes and (iii) any Indebtedness Incurred pursuant
to clause (b)(xi) of Section 4.3. For purposes of Section 4.7, the amount of
consideration received by the Company or any Restricted Subsidiary for the
assumption of Senior Indebtedness by any purchaser of the Company's property,
assets or shares shall be equal to the face value of such Senior Indebtedness.
"Senior Secured Notes" means the $[120,000,000] aggregate principal
--------------------
amount of the 11.625% Senior Secured Notes due 1999 of the Company issued
pursuant to the Senior Indenture and any Senior Secured Notes issued upon the
transfer thereof or in substitution therefor, as the same may be amended,
modified, supplemented or extended from time to time (provided that the term
"Senior Secured Notes" shall not include any amendment, modification or
extension thereof, or supplement thereto, to the extent such amendment,
modification, extension or supplement increases or permits increase in the
principal amount outstanding or to be outstanding thereunder not permitted under
the terms of Section 4.3 ("Non-Permitted Increases"), and in the event any such
Non-Permitted Increases are provided for in any such amendment, supplement,
modification or extension, the term "Senior Secured Notes" shall thereafter mean
the Senior Secured Notes as in effect prior thereto without giving effect to
such Non-Permitted Increases).
"Stated Maturity" means, with respect to any security, the date
---------------
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the Holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
-20-
<PAGE>
"Subordinated Obligation" means any Indebtedness of the Company
-----------------------
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities pursuant to the
terms of such Indebtedness or pursuant to a written agreement.
"Subsidiary" of any Person means any corporation, association,
----------
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i) such
Person, (ii) such Person and one or more Subsidiaries of such Person or (iii)
one or more Subsidiaries of such Person.
"Temporary Cash Investments" means any of the following: (i)
--------------------------
investments in U.S. Government Obligations maturing within 90 days of the date
of acquisition thereof, (ii) investments in time deposit accounts, certificates
of deposit and money market deposits maturing within 90 days of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States of America or any State thereof having capital,
surplus and undivided profits aggregating in excess of $500,000,000 (or the
Dollar Equivalent thereof) and whose long-term debt is rated "A" or higher
according to Moody's Investors Service, Inc. (or such equivalent rating by at
least one "nationally recognized statistical rating organization" (as defined in
Rule 436 under the Securities Act)), (iii) repurchase obligations with a term of
not more than 7 days for underlying securities of the types described in clause
(i) entered into with a bank meeting the qualifications described in clause (ii)
and (iv) investments in commercial paper, maturing not more than 90 days after
the date of acquisition, issued by a corporation (other than an Affiliate of the
Company) organized and in existence under the laws of the United States of
America with a rating at the time as of which any investment therein is made of
"P-1" (or higher) according to Moody's Investors Service, Inc. or "A-1" (or
higher) according to Standard and Poor's Corporation.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
---
77bbbb) as in effect on the date of this Indenture; provided, however, that in
-------- -------
the event the Trust Indenture Act of 1939 is amended after such date, "TIA"
means, to the extent required by any such amendment, the Trust Indenture Act of
1939, as so amended.
-21-
<PAGE>
"Trade Payables" means, with respect to any Person, any accounts
--------------
payable or any indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person arising in the ordinary course of business
of such Person in connection with the acquisition of goods or services,
including under the Company's Amended and Restated Master Supply Agreement dated
as of October 8, 1993, among the Company, SKC Limited and SKC America, Inc., as
such Agreement is in effect on the Issue Date.
"Trustee" means the party named as such in this Indenture until a
-------
successor replaces it in accordance with the provisions of this Indenture and,
thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
-------------
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Uniform Commercial Code" means the Uniform Commercial Code as in
-----------------------
effect from time to time in, unless the context otherwise specifies, New York.
"Unrestricted Subsidiary" means (i) each Subsidiary of the Company that
-----------------------
the Company has designated, or is deemed to have designated, pursuant to the
provisions described under Section 4.15 as an Unrestricted Subsidiary and that
has not been redesignated a Restricted Subsidiary and (ii) any Subsidiary of an
Unrestricted Subsidiary.
"U.S. Government Obligations" means direct obligations (or certificates
---------------------------
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"U.S. Restricted Subsidiary" means any Restricted Subsidiary that is
--------------------------
not a Foreign Restricted Subsidiary.
"Voting Stock" of a corporation means all classes of Capital Stock of
------------
such corporation then outstanding and normally entitled to vote in the election
of directors.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the Capital
-----------------------
Stock of which (other than directors' qualifying shares) is owned by the Company
or another Wholly Owned Subsidiary.
-22-
<PAGE>
SECTION 1.2. Other Definitions.
-----------------
DEFINED IN
TERM SECTION
---- -----------
"Affiliate Transaction"........................... 4.8
"Application Date"................................ 4.7(a)
"Asset Disposition Purchase Amount"............... 4.7(a)
"Asset Disposition Purchase Date"................. 4.7(a)
"Asset Disposition Purchase Notice"............... 4.7(d)
"Asset Disposition Purchase Offer"................ 4.7(a)
"Asset Disposition Purchase Price"................ 4.7(a)
"Asset Disposition Trigger"....................... 4.7(b)
"Bankruptcy Law".................................. 6.1
"Change of Control Offer"......................... 4.9(a)
"Change of Control Purchase Date"................. 4.9(a)
"Change of Control Purchase Notice"............... 4.9(a)
"Change of Control Purchase Price"................ 4.9(a)
"covenant defeasance option"...................... 8.1(b)
"Custodian"....................................... 6.1
"Defaulted Interest".............................. 2.11
"Event of Default"................................ 6.1
"legal defeasance option"......................... 8.1(b)
"Legal Holiday"................................... 11.7
"Notice of Default"............................... 6.1
"Paying Agent".................................... 2.3
"Payment"......................................... 9.2
"Permitted Indebtedness".......................... 4.3(b)
"Permitted Restricted Subsidiary
Indebtedness"................................... 4.4(b)
"Refinanced Indebtedness"......................... 4.3(e)
"Registrar"....................................... 2.3
"Restricted Payment".............................. 4.5
"Surviving Entity"................................ Article 5
SECTION 1.3. Incorporation by Reference of Trust Indenture Act. This
-------------------------------------------------
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
-23-
<PAGE>
"obligor" on the indenture securities means the Company and any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.4. Rules of Construction. Unless the context otherwise
---------------------
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP; and
(7) the principal amount of any Preferred Stock shall be the greater
of (i) the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect to
such Preferred Stock.
ARTICLE 2
THE SECURITIES
--------------
SECTION 2.1. Form and Dating. The Securities and the Trustee's
---------------
certificate of authentication shall be substantially in the form of Exhibit A,
which is hereby incorporated in and expressly made a part of this Indenture.
The Securities may have notations, legends or endorsements required by law,
stock exchange rule, agreements to which the Company is subject, if any, or
usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company). The Company shall furnish any such legend not
contained in Exhibit A to the Trustee in writing. Each Security shall be dated
the date of its authentication. The terms of the Securities set forth in
Exhibit A are part of the terms of this Indenture.
-24-
<PAGE>
The Company may issue Accrued Interest Securities in accordance with
the second paragraph of Section 2 of the Securities. All Accrued Interest
Securities so issued shall constitute obligations of the Company under this
Indenture and shall be subject to the terms and conditions contained herein
(except with respect to the date from which interest shall accrue) as if they
were issued on the Issue Date.
SECTION 2.2. Execution and Authentication. Two Officers shall sign
----------------------------
the Securities for the Company by manual or facsimile signature. The Company's
seal shall be impressed, affixed, imprinted or reproduced on the Securities and
may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate and make available for delivery
Securities, from time to time, in an aggregate principal amount of $160,000,000
(plus the principal amount of any Accrued Interest Securities issued pursuant to
the second paragraph of Section 2 of the Securities), upon a written order of
the Company signed by two Officers. Such order shall specify the amount of the
Securities to be authenticated and the date on which such Securities are to be
authenticated and shall further provide instructions concerning registration,
amounts for each Holder and delivery. The aggregate principal amount of
Securities outstanding at any time may not exceed $160,000,000 (plus the
principal amount of any Accrued Interest Securities issued pursuant to the
second paragraph of Section 2 of the Securities) except as provided in Section
2.7. The Securities shall be issued in fully registered form, without coupons
in denominations of $1,000 or any integral multiple thereof (except that Accrued
Interest Securities may be issued in any denomination).
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent has
the same rights as any Registrar, Paying Agent or agent for service of notices
and demands.
-25-
<PAGE>
SECTION 2.3. Registrar and Paying Agent. The Company shall maintain
--------------------------
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"), at least one of
each such office to be located in the City of New York. The Registrar shall
keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and
shall be entitled to appropriate compensation therefor pursuant to Section 7.7.
The Company or any of its domestically incorporated Wholly Owned Subsidiaries
may act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.
SECTION 2.4. Paying Agent To Hold Money in Trust. On or prior to
-----------------------------------
each due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Securities and
shall notify the Trustee of any default by the Company in making any such
payment. If the Company or a Subsidiary of the Company acts as Paying Agent, it
shall segregate the money held by it as Paying Agent and hold it as a separate
trust fund. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed by the Paying
Agent. Upon complying with this Section, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
SECTION 2.5. Securityholder Lists. The Trustee shall preserve in as
--------------------
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in
-26-
<PAGE>
such form and as of such date as the Trustee may reasonably require of the names
and addresses of Securityholders.
SECTION 2.6. Transfer and Exchange. The Securities shall be issued
---------------------
in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of Section 8-401(1)
of the Uniform Commercial Code are met. When Securities are presented to the
Registrar or a co-registrar with a request to exchange them for an equal
principal amount of Securities of other denominations, the Registrar shall make
the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar's or co-registrar's
request. The Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with any transfer or
exchange pursuant to this Section.
Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, the Paying Agent, the Registrar or any co-
registrar may deem and treat the person in whose name a Security is registered
as the absolute owner of such Security for the purpose of receiving payment of
principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the Company,
the Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be entitled to the
same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
SECTION 2.7. Replacement Securities. If a mutilated Security is
----------------------
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee or the Company. If required by
the Trustee or the Company, such Holder shall furnish an indemnity bond
sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from
any loss which any of them may suffer if a Security is replaced. The Company
and the Trustee may charge the Holder for their expenses in replacing a
Security.
-27-
<PAGE>
Every replacement Security is an additional obligation of the Company.
SECTION 2.8. Outstanding Securities. Securities outstanding at any
----------------------
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal of, and premium, if any, and interest payable on, that date with
respect to the Securities (or portions thereof) to be redeemed or maturing, as
the case may be, then on and after that date such Securities (or portions
thereof) cease to be outstanding and interest on them ceases to accrue.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction or consent or any amendment,
modification or other change to the Indenture, Securities owned by the Company
or by an Affiliate of the Company shall be disregarded and treated as if they
were not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent
or any amendment, modification or other change to the Indenture, only Securities
which the Trustee actually knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith shall not be
disregarded if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to the Securities and that the pledgee is
not the Company or an Affiliate of the Company.
SECTION 2.9. Temporary Securities. Until definitive Securities are
--------------------
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form
of definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.
-28-
<PAGE>
SECTION 2.10. Cancellation. The Company at any time may deliver
------------
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver such canceled Securities to the Company. The Company
may not issue new Securities to replace Securities it has redeemed, paid or
delivered to the Trustee for cancellation.
SECTION 2.11. Defaulted Interest. Any interest on any Security which
------------------
is payable, but is not punctually paid or duly provided for, on the dates and in
the manner provided in the Securities and this Indenture (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant record date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (i) or (ii) below:
(i) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Security and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such special record date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the special record date therefor to
be given to each Holder, not less than 10 days prior to such special record
date. Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities are registered
at the close of business on such special record date.
-29-
<PAGE>
(ii) The Company may make payment of any Defaulted Interest on the
Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section 2.11, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.12. Record Date. The Company may set a record date for
-----------
purposes of determining the identity of Securityholders entitled to vote or to
consent to any action by vote or consent authorized or permitted by Sections 6.4
and 6.5. Unless this Indenture provides otherwise, such record date shall be
the later of 30 days prior to the first solicitation of such consent or the date
of the most recent list of Securityholders furnished to the Trustee pursuant to
Section 2.5 prior to such solicitation.
SECTION 2.13. CUSIP Numbers. The Company in issuing the Securities
-------------
may use CUSIP numbers (if then generally in use), and, if so, the Trustee shall
use CUSIP numbers in notices of redemption as of convenience to Holders;
provided, that any such notice may state that no representation is made as to
- --------
the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
ARTICLE 3
REDEMPTION
----------
SECTION 3.1. Notices to Trustee. If the Company elects to redeem
------------------
Securities pursuant to paragraph 5 of the Securities or is required to redeem
Securities pursuant to paragraph 6 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.
The Company shall give each notice to the Trustee provided for in this
Section at least 45 days (or such lesser time as is acceptable to the Trustee)
but not more than 60 days before the redemption date unless the Trustee consents
to a
-30-
<PAGE>
shorter period. Such notice shall be accompanied by an Officers' Certificate
and an Opinion of Counsel from the Company to the effect that such redemption
will comply with the conditions herein. If fewer than all the Securities are to
be redeemed, the record date relating to such redemption shall be selected by
the Company and given to the Trustee, which record date shall be not less than
15 days after the date of notice to the Trustee.
SECTION 3.2. Selection of Securities To Be Redeemed. If fewer than
--------------------------------------
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by lot or by a method that complies with applicable
legal and securities exchange requirements, if any, and that the Trustee
considers fair and appropriate and in accordance with methods generally used at
the time of selection by fiduciaries in similar circumstances. The Trustee
shall make the selection from outstanding Securities not previously called for
redemption. The Trustee may select for redemption portions of the principal of
Securities that have denominations larger than $1,000. Securities and portions
of them the Trustee selects shall be in amounts of $1,000 or a whole multiple of
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
SECTION 3.3. Notice of Redemption. At least 15 days but not more
--------------------
than 60 days before a date for redemption of Securities, the Company shall mail
a notice of redemption by first-class mail to each Holder of Securities to be
redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to be
redeemed;
(6) that, unless the Company defaults in making such redemption
payment, interest on Securities (or portions thereof) called for redemption
ceases to accrue on and after the redemption date;
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<PAGE>
(7) the paragraph of the Securities pursuant to which the Securities called
for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.4. Effect of Notice of Redemption. Once notice of
------------------------------
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date). Failure to give
notice or any defect in the notice to any Holder shall not affect the validity
of the notice to any other Holder.
SECTION 3.5. Deposit of Redemption Price. On or prior to the
---------------------------
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest (subject to
the right of Holders of record on the relevant record date to receive interest
due on the related interest payment date) on all Securities to be redeemed on
that date other than Securities or portions of Securities called for redemption
which have been delivered by the Company to the Trustee for cancellation.
SECTION 3.6. Securities Redeemed in Part. Upon surrender of a
---------------------------
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 4
COVENANTS
---------
SECTION 4.1. Payment of Securities. The Company shall promptly pay
---------------------
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent (other than the Company or a Wholly Owed
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<PAGE>
Subsidiary acting as paying agent) holds in accordance with this Indenture money
sufficient to pay all principal and interest then due.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.2. SEC Reports. The Company shall file the annual report
-----------
and other documents, reports and information required by Section 13 or 15(d) of
the Exchange Act with the SEC and, upon such filing, the Company shall (i)
promptly furnish such reports, documents and information to the Trustee and (ii)
within 15 days after such filing with the SEC, furnish, or cause the Trustee to
furnish, such reports, documents and information to the Securityholders. The
Company shall use its best efforts to remain subject to the periodic reporting
requirements of Section 13 of the Exchange Act. In the event the Company is no
longer subject to the periodic reporting requirements of Section 13 or 15(d) of
the Exchange Act, the Company shall file with the SEC and furnish to the Trustee
and to the Securityholders the annual reports and other documents, reports and
information as if it were subject to such reporting requirements; provided,
--------
however, that the Company shall not be so obligated to file such reports,
- -------
documents and information with the SEC if the SEC does not permit or accept such
filings, in which event such reports, documents and information shall be
provided to the Trustee and the Holders at the times the Company would have been
required to provide such reports, documents and information had it continued to
have been subject to such reporting requirements. The Company also shall comply
with the other provisions of TIA (S) 314(a).
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.3. Limitation on Indebtedness. (a) The Company shall not,
--------------------------
directly or indirectly, Incur any Indebtedness unless (i) no Default or Event of
Default shall have occurred and be continuing at the time of such Incurrence or
would occur as a consequence of such Incurrence and (ii) such Indebtedness is
Permitted Indebtedness under Section 4.3(b).
(b) "Permitted Indebtedness" means:
(i) Indebtedness to be outstanding immediately after the Issue Date and
listed on Schedule I to this Indenture;
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(ii) Indebtedness represented by the Securities;
(iii) Indebtedness Incurred by the Company and ranking on a parity
with, or subordinated to, the Securities if, after giving pro forma effect
--- -----
to such Incurrence, the Consolidated Coverage Ratio would be equal to at
least [1.75] to 1;
(iv) Indebtedness (A) under Interest Rate Protection Agreements
relating to Indebtedness permitted hereunder entered into in the ordinary
course of the Company's financial management and not for speculative
purposes; provided, however, that the notional amount of each such Interest
-------- -------
Rate Protection Agreement does not exceed the principal amount of the
Indebtedness to which such Interest Rate Protection Agreement relates; or
(B) under Currency Exchange Protection Agreements entered into in the
ordinary course of the Company's financial management and not for
speculative purposes; provided, however, in the case of either clause (A)
-------- -------
or (B), any such Interest Rate Protection Agreement or Currency Exchange
Protection Agreement, as the case may be, does not increase the
Indebtedness of the Company outstanding at any time other than as a result
of fluctuations in the interest rates or exchange rates, as the case may
be, or by reason of customary fees, indemnities and compensation payable
thereunder;
(v) Indebtedness owing to and held by any Wholly Owned Subsidiary;
provided, however, that any subsequent issuance or transfer of any Capital
-------- -------
Stock that results in any such Wholly Owned Subsidiary ceasing to be a
Wholly Owned Subsidiary or any subsequent transfer of any such Indebtedness
(except to the Company or another Wholly Owned Subsidiary) shall be deemed,
in each case, to constitute the incurrence of such Indebtedness by the
issuer thereof;
(vi) Indebtedness Incurred in connection with a prepayment of
Securities pursuant to a Change of Control Offer; provided, however, that
-------- -------
the aggregate principal amount of such Indebtedness does not exceed [101%]
of the aggregate principal amount of the Securities prepaid; provided,
--------
further, however, that such Indebtedness (A) has an Average Life equal to
------- -------
or greater than the remaining Average Life of the Securities and (B) does
not mature prior to the Stated Maturity of the Securities;
(vii) Indebtedness in respect of Purchase Money Indebtedness or
Capital Lease Obligations directly Incurred by the Company; provided,
--------
however, that the sum of (A) the aggregate principal amount of Purchase
-------
Money Indebtedness incurred by the Company or by Restricted Subsidiaries as
permitted under Section 4.4(b)(ii) and (B) the aggregate amount of Capital
Lease Obligations Incurred by the Company
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<PAGE>
or Incurred by Restricted Subsidiaries as permitted under Section
4.4(b)(ii) does not at any one time outstanding exceed $[20,000,000] (such
maximum permitted amount to increase by [$10,000,000] on each anniversary
of the Issue Date);
(viii) Indebtedness Incurred (A) in the ordinary course of business of
the Company with respect to trade credit made available to the Company in
connection with the obtaining of goods or services by the Company
(including commercial letters of credit, bankers' acceptances or
accommodation Guarantees for the benefit of trade creditors or suppliers),
in each case for a period not to exceed 180 days, in an amount not to
exceed the purchase price for the goods or services for which such credit
is made available and which do not constitute obligations for borrowed
money, and (B) with respect to standby letters of credit, performance bonds
and surety bonds that do not constitute obligations for borrowed money
Incurred by the Company in the ordinary course of business relating to
services to be performed by or on behalf of the Company;
(ix) Indebtedness in respect of Guarantees by the Company of
Indebtedness of any Restricted Subsidiary permitted to be Incurred under
Section 4.4(b);
(x) Indebtedness represented by the Senior Secured Notes in an
aggregate principal amount not to exceed [$120,000,000], less, at any
specified date, an amount equal to actual repayments of the Senior Secured
Notes prior to such date, regardless of any subsequent increase in the
aggregate principal amount of the Senior Secured Notes pursuant to any
amendment or modification of, or supplement to, the Senior Secured Notes or
the Senior Indenture after the Issue Date;
(xi) Indebtedness Incurred by the Company which ranks senior to the
Securities and is not subordinated to any Indebtedness of the Company if,
after giving pro forma effect to such Incurrence, (i) the Consolidated
--- -----
Coverage Ratio would be equal to at least 2.5 to 1 or (ii) the total
principal amount of Senior Debt would not exceed $80,000,000.
(xii) Refinancing Indebtedness Incurred in respect of Indebtedness
Incurred pursuant to clause (i), (ii), (vi) or (x) above; and
[(xiii) in addition to any Indebtedness permitted by clauses (i) through
(xii) above, up to an aggregate of (A) $[25,000,000] in principal amount of
Indebtedness at any one time outstanding minus (B) the principal amount of
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<PAGE>
Indebtedness at such time outstanding of any Restricted Subsidiaries
permitted pursuant to Section 4.4(b)(vi)].
(c) The Company shall not directly or indirectly Incur any Indebtedness
if the proceeds thereof are used, directly or indirectly, to repay, prepay,
redeem, defease, retire, refund or refinance any Subordinated Obligations unless
such Indebtedness shall be subordinated to the Securities to at least the same
extent as such Subordinated Obligations.
(d) For purposes of determining the outstanding principal amount of any
particular Indebtedness Incurred pursuant to this Section or Section 4.4, (1)
Indebtedness permitted by this Section or Section 4.4 need not be permitted
solely by reference to one provision permitting such Indebtedness but may be
permitted in part by one such provision and in part by one or more other
provisions of this Section or Section 4.4 permitting such Indebtedness and (2)
in the event that Indebtedness or any portion thereof meets the criteria of more
than one of the types of Indebtedness described in this Section or Section 4.4,
the Company, in its sole discretion, shall classify such Indebtedness and only
be required to include the amount of such Indebtedness in one of such types.
(e) For purposes of determining whether the principal amount of any
Refinancing Indebtedness permitted by this Section or Section 4.4 does not, in
the event it is issued in a currency different from the currency in which the
Indebtedness being refunded or refinanced or paid at maturity ("Refinanced
Indebtedness") was issued, exceed the principal amount of the Refinanced
Indebtedness, the spot rate for the purchase of the currency of the Refinanced
Indebtedness with the currency of the Refinancing Indebtedness, as published in
The Wall Street Journal in the "Exchange Rates" column under the heading
- -----------------------
"Currency Trading" on the date two Business Days prior to such determination,
shall be used. If The Wall Street Journal does not publish such spot rate on
-----------------------
such date, then the spot rate for the purchase of the currency of the Refinanced
Indebtedness with the currency of the Refinancing Indebtedness, as quoted by
________________, or any successor thereto, in New York City at approximately
11:00 a.m. (New York time) on the date two Business Days prior to such
determination, shall be used.
Except as provided in the preceding paragraph, for purposes of
determining the Dollar Equivalent of any Indebtedness denominated in a currency
other than U.S. dollars outstanding at any time as permitted by this Section or
Section 4.4, such Dollar Equivalent shall be the Dollar Equivalent of such
currency at the date such Indebtedness is issued; provided, however, that if
-------- -------
such Indebtedness constituted Refinancing Indebtedness, such conversion shall be
made based on the Dollar Equivalent of the Refinanced Indebtedness at the date
of the
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<PAGE>
issuance of the Refinanced Indebtedness (or any preceding Refinanced
Indebtedness, as applicable).
SECTION 4.4. Limitation on Restricted Subsidiary Indebtedness and
----------------------------------------------------
Preferred Stock. (a) The Company shall not permit any Restricted Subsidiary
- ---------------
to, directly or indirectly, Incur any Indebtedness or issue any Preferred Stock
unless (i) no Default or Event of Default shall have occurred and be continuing
at the time of such Incurrence or would occur as a consequence of such
Incurrence and (ii) such Indebtedness or Preferred Stock is Permitted Restricted
Subsidiary Indebtedness under Section 4.4(b).
(b) "Permitted Restricted Subsidiary Indebtedness"
means:
(i) Indebtedness or Preferred Stock to be outstanding immediately
after the Issue Date and listed on Schedule I to this Indenture;
(ii) Indebtedness in respect of Purchase Money Indebtedness or
Capital Lease Obligations directly Incurred by any Restricted Subsidiary;
provided, however, that the sum of (A) the aggregate amount of Capital
-------- -------
Lease Obligations Incurred by Restricted Subsidiaries or Incurred by the
Company pursuant to Section 4.3(b)(vii) and (B) the aggregate principal
amount of Purchase Money Indebtedness Incurred by Restricted Subsidiaries
or Incurred by the Company pursuant to Section 4.3(b)(vii) does not at any
one time outstanding exceed $[20,000,000] (such maximum permitted amount to
increase by [$10,000,000] on each anniversary of the Issue Date);
(iii) Indebtedness incurred (A) in the ordinary course of business of
any Restricted Subsidiary with respect to trade credit made available to
such Restricted Subsidiary in connection with the obtaining of goods or
services by such Restricted Subsidiary (including commercial letters of
credit, bankers' acceptances or accommodation Guarantees for the benefit of
trade creditors or suppliers), in each case for a period not to exceed 180
days, in an amount not to exceed the purchase price for the goods or
services for which such credit is made available and which do not
constitute obligations for borrowed money and (B) standby letters of
credit, performance bonds and surety bonds that do not constitute
obligations for borrowed money Incurred by any Restricted Subsidiary' in
the ordinary course of business relating to services to be performed by or
on behalf of such Restricted Subsidiary;
(iv) Indebtedness (A) under Interest Rate Protection Agreements
relating to Indebtedness permitted hereunder entered into in the ordinary
course of any Restricted
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<PAGE>
Subsidiary's financial management and not for speculative purposes;
provided, however, that the notional amount of each such Interest Rate
-------- -------
Protection Agreement does not exceed the principal amount of the
Indebtedness to which such Interest Rate Protection Agreement relates; or
(B) under Currency Exchange Protection Agreements entered into in the
ordinary course of any Foreign Subsidiary's financial management and not
for speculative purposes; provided, however, in the case of either clause
-------- -------
(A) or (B), any such Interest Rate Protection Agreement or Currency
Exchange Protection Agreement, as the case may be, does not increase the
Indebtedness of such Subsidiary outstanding at any time other than as a
result of fluctuations in the interest rates or exchange rates, as the case
may be, or by reason of customary fees, indemnities and compensation
payable thereunder;
(v) Indebtedness or Preferred Stock owing to and held by the Company
or any Wholly Owned Subsidiary; provided, however, that any subsequent
-------- -------
issuance or transfer of any Capital Stock that results in any such Wholly
Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any subsequent
transfer of any such Indebtedness or Preferred Stock (except to the Company
or a Wholly Owned Subsidiary) shall be deemed, in each case, to constitute
the incurrence of such Indebtedness or Preferred Stock by the issuer
thereof;
(vi) Refinancing Indebtedness Incurred in respect of Indebtedness
Incurred pursuant to clause (i) above; and
(vii) in addition to any Indebtedness permitted by clauses (i) through
(v) above, up to an aggregate of $[10,000,000] in principal amount of
Indebtedness of Foreign Restricted Subsidiaries at any one time
outstanding.
SECTION 4.5. Limitation on Restricted Payments. (a) The Company
---------------------------------
shall not, and shall not permit any Restricted Subsidiary, to, directly or
indirectly, (i) declare or pay any dividend on, or make any distribution on or
in respect of, its Capital Stock (including any payment in connection with any
merger or consolidation involving the Company), except dividends or
distributions payable solely in its Capital Stock (other than Disqualified
Stock) or in options, warrants or other rights to purchase such Capital Stock
and except dividends or distributions payable solely to the Company or any
Restricted Subsidiary, (ii) purchase, redeem, retire or otherwise acquire for
value any Capital Stock of the Company or any Restricted Subsidiary held by
Persons other than the Company or a Restricted Subsidiary, (iii) purchase,
repurchase, redeem, defease or otherwise acquire or retire for value (including
pursuant to mandatory repurchase covenants), prior to any
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<PAGE>
scheduled repayment, scheduled sinking fund payment or other scheduled maturity,
any Subordinated Obligation or (iv) make any Investment (other than a Permitted
Investment) in any Person (any such dividend, distribution, purchase,
redemption, repurchase, defeasance, other acquisition, retirement or Investment
being herein referred to as a "Restricted Payment"), if at the time of and after
giving effect to the proposed Restricted Payment:
(1) a Default or Event of Default shall have occurred and be continuing
(or would result therefrom);
(2) the Company could not Incur at least $1.00 of additional
Indebtedness under Section 4.3(b)(iii); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments (the amount so expended, if other than in cash, to be
determined in good faith by the Board of Directors, whose determination
shall be evidenced by a Board Resolution furnished to the Trustee) declared
or made since the Issue Date, would exceed, without duplication, the sum
of:
(A) an amount equal to 50% of the Consolidated Net Income accrued
during the period (treated as one accounting period) beginning on the
first day of the fiscal quarter of the Company immediately following
the fiscal quarter in which the Issue Date occurs and ending on the
last day of the Company's last fiscal quarter ended at least 45 days
prior to the date of such proposed Restricted Payment (or, if such
Consolidated Net Income shall be a deficit, minus 100% of such
deficit) and minus 100% of the amount of any write-downs, writeoffs,
other negative revaluations and other negative extraordinary charges
not otherwise reflected in Consolidated Net Income during such period;
(B) the aggregate Net Cash Proceeds received by the Company from
the issue or sale of its Capital Stock, including Capital Stock of the
Company issued upon conversion of convertible debt or the exercise of
options, warrants or rights to purchase Capital Stock of the Company,
but excluding Disqualified Stock, subsequent to the Issue Date (other
than an issuance or sale to (i) a Subsidiary of the Company, (ii) an
employee stock ownership plan or other trust established by the
Company or any of its Subsidiaries or (iii) management employees);
(C) the amount by which Indebtedness of the Company or its
Restricted Subsidiaries is reduced on the Company's balance sheet upon
the conversion or
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<PAGE>
exchange (other than by a Subsidiary of the Company) subsequent to the
Issue Date of any Indebtedness of the Company or its Restricted
Subsidiaries convertible or exchangeable for Capital Stock (other than
Disqualified Stock) of the Company (less the amount of any cash or
other property distributed by the Company or any Restricted Subsidiary
upon such conversion or exchange); and
(D) the amount equal to the net reduction in Investments in
Unrestricted Subsidiaries resulting from (i) payments of dividends,
repayments of loans or advances or other transfers of assets to the
Company or any Restricted Subsidiary from Unrestricted Subsidiaries or
(ii) the redesignation of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the definition of
"Investment") not to exceed, in the case of any Unrestricted
Subsidiary, the amount of Investments previously made (and treated as
a Restricted Payment) by the Company or any Restricted Subsidiary in
such Unrestricted Subsidiary.
(b) The provisions of Section 4.5(a) shall not prohibit:
(i) any purchase or redemption of Capital Stock of the Company or
Subordinated Obligations made in exchange for, or out of the proceeds of a
substantially concurrent sale of, Capital Stock of the Company (other than
Disqualified Stock and other than Capital Stock issued or sold to a
Subsidiary of the Company or an employee stock ownership plan or other
trust established by the Company or any of its Subsidiaries) or out of
proceeds of an equity contribution made substantially concurrently with
such purchase or redemption; provided, however, that (A) such purchase or
-------- -------
redemption shall be excluded in the calculation of the amount of Restricted
Payments and (B) the Net Cash Proceeds from such sale shall be excluded
from the calculation of amounts under Section 4.5(a)(3)(B);
(ii) any purchase or redemption of Subordinated Obligations made in
exchange for, or out of the proceeds of the substantially concurrent sale
of, Indebtedness of the Company which is permitted to be Incurred pursuant
to Section 4.3; provided, however, that (A) such Indebtedness is Incurred
-------- -------
in an aggregate principal amount (or if issued with original issue
discount, an aggregate issue price) that is equal to or less than the
aggregate sum of (1) the aggregate principal amount (or if issued with
original issue discount, the aggregate accreted value) then outstanding of
such Subordinated Obligations being so purchased or redeemed and (2) any
premiums, fees and other
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<PAGE>
expenses paid by the Company or any Restricted Subsidiary in connection
with such purchase or redemption, (B) such Indebtedness is at least as
subordinated to the Securities as such Subordinated Obligations so
purchased or redeemed and the covenants relating to such Indebtedness are
no more restrictive in the aggregate than those of such Subordinated
Obligations, (C) such Indebtedness has a Stated Maturity no earlier than
the Stated Maturity of such Subordinated Obligations, (D) such Indebtedness
has an Average Life at the time such Indebtedness is Incurred equal to or
greater than the Average Life of such Subordinated Obligations and (E) such
purchase or redemption shall be excluded in the calculation of the amount
of Restricted Payments;
(iii) any payment in cash in lieu of the issuance of fractional shares
of Capital Stock to any Holder of Capital Stock warrants of the Company
outstanding on the Issue Date pursuant to the exchange of such warrants for
other Capital Stock of the Company upon the exercise of such warrants
pursuant to the terms thereof; provided, however, that such payment shall
-------- -------
be excluded in the calculation of the amount of Restricted Payments;
(iv) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with Section 4.5(a); provided, however, that at the time of payment of such
-------- -------
dividend, no other Default shall have occurred and be continuing (or result
therefrom); provided, further, however, that such dividend shall be
-------- ------- -------
included in the calculation of the amount of Restricted Payments from and
after the date of declaration of such dividend; or
(v) so long as no Default of Event of Default shall have occurred and
be continuing or would occur as a consequence thereof, the redemption or
repurchase of Capital Stock of the Company, options in respect thereof or
related rights pursuant to and in accordance with the repurchase provisions
of any employee stock option or any stock purchase or other agreement
between the Company and any of its management employees; provided, however,
-------- -------
that such redemptions or repurchases pursuant to this Section 4.5(b)(v)
from and after the Issue Date shall not in the aggregate exceed $1,000,000,
plus the amount of any net cash proceeds to the Company from sales of
Capital Stock of the Company to management employees subsequent to the
Issue Date.
SECTION 4.6. Limitation on Restrictions on Distributions from
------------------------------------------------
Restricted Subsidiaries. The Company shall not, and shall not permit any
- -----------------------
Restricted Subsidiary to, directly or indirectly, create or otherwise cause or
permit to exist or
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<PAGE>
become effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions on or in respect
of its Capital Stock to the Company or any Restricted Subsidiary or pay any
Indebtedness owed to the Company or any Restricted Subsidiary, (ii) make loans
or advances to the Company or (iii) transfer any of its property or assets to
the Company or any Restricted Subsidiary, except for:
(a) any encumbrance or restriction pursuant to an agreement in effect
at or entered into on the Issue Date;
(b) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness Incurred
by such Restricted Subsidiary on or prior to the date on which such
Restricted Subsidiary became a Subsidiary of, or was acquired by, the
Company (other than Indebtedness Incurred as consideration in, or to
provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant to
which such Restricted Subsidiary became a Subsidiary of, or was acquired
by, the Company) and outstanding on such date;
(c) any encumbrance or restriction pursuant to an agreement relating to
an acquisition of property, so long as the encumbrances or restrictions in
such agreement relate solely to the property so acquired;
(d) any encumbrance or restriction pursuant to an agreement effecting
a refinancing of Indebtedness Incurred pursuant to an agreement referred to
in clause (a), (b) or (c) or contained in any amendment to any such
agreement; provided, however, that any encumbrance and any restriction
-------- -------
contained in any such refinancing agreement or amendment is no less
favorable to the Securityholders than any encumbrance or restriction
contained in such agreement; and
(e) in the case of clause (iii), any encumbrance or restriction (1)
that restricts in a customary manner the subletting, assignment or transfer
of any property or asset that is a lease, license, conveyance or contract
or similar property or asset, (2) arising by virtue of any transfer of,
agreement to transfer, option or right with respect to, or Lien on, any
property or assets of the Company or any Restricted Subsidiary not
otherwise prohibited by this Indenture or (3) arising or agreed to in the
ordinary course of business and that does not, individually or in the
aggregate, detract from the value of property or assets of the Company or
any Restricted Subsidiary in any manner material to the Company or such
Restricted Subsidiary.
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<PAGE>
SECTION 4.7. Limitation on Sales of Assets and Restricted Subsidiary
-------------------------------------------------------
Stock. (a) The Company shall not, and shall not permit any Restricted
- -----
Subsidiary to, make any Asset Disposition unless (i) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Disposition at least equal to the Fair Market Value of the shares,
property and assets subject to such Asset Disposition, (ii) at least 75% of such
consideration (or, in the event of any Asset Disposition of all or any portion
of the Company's Magnetics Division or a Foreign Subsidiary, at least 50% of
such consideration) consists of cash, Temporary Cash Investments or the
assumption of Senior Indebtedness of the Company or any Restricted Subsidiary
and the release of the Company or such Restricted Subsidiary from all liability
under such Senior Indebtedness, (iii) in connection with any Asset Disposition
with an aggregate consideration greater than $10,000,000, the Company delivers
an Officers' Certificate to the Trustee certifying that such Asset Disposition
complies with clauses (i) and (ii) and that such Asset Disposition was approved
by a majority of the Board of Directors including a majority of the
disinterested members of the Board of Directors, as evidenced by a Board
Resolution delivered to the Trustee and (iv) 100% of the Net Cash Proceeds of
such Asset Disposition are applied as follows: (A) within 365 days of receipt
thereof (or within such longer period after receipt thereof as may be permitted
by the terms of the Senior Indenture)(the last day of such period, the
"Application Date"), the Company or such Restricted Subsidiary, as the case may
be, may apply all or a portion of such Net Cash Proceeds to the repayment of the
Senior Secured Notes or the reinvestment (whether by acquisition of an existing
business or expansion, including, without limitation, capital expenditures) in
one or more Permitted Lines of Business, or any combination thereof, and (B) to
the extent any or all of such Net Cash Proceeds are not applied as set forth
above in clause (A), the Company shall apply all remaining Net Cash Proceeds of
such Asset Disposition (the "Asset Disposition Purchase Amount") to an offer to
purchase (an "Asset Disposition Purchase Offer") Securities, on the first
Business Day occurring 60 Business Days after the Application Date (the "Asset
Disposition Purchase Date") for cash at a purchase price (such price, the "Asset
Disposition Purchase Price") equal to 100% of the principal amount of the
Securities so purchased plus accrued and unpaid interest thereon to the Asset
Disposition Purchase Date, in accordance with the procedures set forth in
Section 4.7(c). Any such Net Cash Proceeds which remain after the acquisition
by the Company of Securities tendered (and not withdrawn) by Securityholders
pursuant to such Asset Disposition Purchase Offer in accordance with the
procedures (including proration in the event of oversubscription) set forth in
Section 4.7(c) shall cease to be Net Cash Proceeds.
(b) Notwithstanding the foregoing, the Company shall not be required
to make an Asset Disposition Purchase Offer
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<PAGE>
until such time as the aggregate amount of Net Cash Proceeds from Asset
Dispositions required to be so applied to the purchase of Securities pursuant to
Section 4.7 (a) exceeds $10,000,000 (the "Asset Disposition Trigger"), and then
the total amount of such Net Cash Proceeds shall be required to be applied to an
Asset Disposition Offer.
(c) Within 30 Business Days of the occurrence of an Asset Disposition
Trigger, (i) the Company shall notify the Trustee in writing of the Asset
Disposition Trigger and shall make the Asset Disposition Purchase Offer to
purchase Securities in an aggregate principal amount equal to the Asset
Disposition Purchase Amount at the Asset Disposition Purchase Price on or before
the Asset Disposition Purchase Date, (ii) the Company shall mail a copy of the
Asset Disposition Purchase Offer to each Securityholder and (iii) the Company
shall cause a notice of the Asset Disposition Purchase Offer to be sent to the
Dow Jones News Service or similar business news service in the United States of
America. The Asset Disposition Purchase Offer shall remain open from the time
such offer is made until the Asset Disposition Purchase Date. The Company shall
purchase all Securities properly tendered pursuant to the Asset Disposition
Purchase Offer and not withdrawn in accordance with the procedures set forth in
the Asset Disposition Purchase Notice (as defined below). The Trustee shall be
under no obligation to ascertain, and the Trustee shall not be deemed to have
knowledge of, the occurrence of an Asset Disposition Trigger or to give notice
with respect thereto other than as provided above upon receipt of notice of the
occurrence of an Asset Disposition Trigger and an Asset Disposition Purchase
Offer from the Company. The Trustee may conclusively assume, in the absence of
receipt of notice of the occurrence of an Asset Disposition Trigger and an Asset
Disposition Purchase Offer from the Company, that no Asset Disposition Trigger
has occurred. The Asset Disposition Purchase Offer shall include a form of
Asset Disposition Purchase Notice to be completed by the Securityholder and
shall state or provide:
(1) the nature of the Asset Dispositions resulting in the Asset
Disposition Trigger, the date or dates such Asset Dispositions occurred and
the amount of the Asset Disposition Purchase Amount;
(2) that the Asset Disposition Purchase Offer is being made pursuant
to this Section 4.7(c) and that Securities in an aggregate principal amount
equal to the Asset Disposition Purchase Amount, selected in accordance with
this Indenture (if more than such amount shall be tendered) on a pro rata
basis (with such adjustments as may be deemed appropriate by the Company so
that only Securities in denominations of $1,000, or integral multiples
thereof, shall be purchased) from among all the
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<PAGE>
Securities properly tendered pursuant to the Asset Disposition Purchase
Offer, will be accepted for payment;
(3) the date by which the Asset Disposition Purchase Notice pursuant
to this Section 4.7(c) must be given;
(4) the Asset Disposition Purchase Date;
(5) the Asset Disposition Purchase Price;
(6) the name and address of the Paying Agent;
(7) that Securities must be surrendered to the Paying Agent at the
office of the Paying Agent to collect payment;
(8) information concerning the business of the Company which the
Company in good faith believes will enable such Holders to make an informed
decision (which at a minimum shall include (i) the most recently filed
Annual Report on Form 10-K (including audited consolidated financial
statements) of the Company, the most recent subsequently filed Quarterly
Report on Form 10-Q and any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report, other than Current Reports describing
Asset Dispositions otherwise described in the offering materials (or
corresponding successor reports) and (ii) a description of material
developments in the Company's business subsequent to the date of the latest
of such Reports.
(9) that the Asset Disposition Purchase Price for any Security as to
which an Asset Disposition Purchase Notice has been duly given and not
withdrawn (subject to proration if Securities with an aggregate principal
amount greater than the Asset Disposition Purchase Amount are so tendered)
will be paid promptly upon the later to occur of the first Business Day
following the Asset Disposition Purchase Date and the time of surrender of
such Security as described in clause (7);
(10) the procedures the Holder must follow to accept the Asset
Disposition Purchase Offer; and
(11) the procedures for withdrawing an Asset Disposition Purchase
Notice.
(d) A Holder may accept an Asset Disposition Purchase Offer by
delivering to the Paying Agent at the office of the Paying Agent a written
notice (an "Asset Disposition Purchase Notice") at any time prior to the close
of business in the location of the office of the Paying Agent on the Asset Sale
Purchase Date, stating:
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<PAGE>
(1) that such Holder elects to have a Security purchased pursuant to
the Asset Disposition Purchase Offer;
(2) the principal amount of the Security that the Holder elects to
have purchased by the Company, which amount must be $1,000 or an integral
multiple thereof, and the certificate numbers of the Securities to be
delivered by such securityholder for purchase by the Company; and
(3) that such Security shall be purchased on the Asset Disposition
Purchase Date pursuant to the terms and conditions specified in this
Indenture.
The delivery of such Security (together with all necessary
endorsements, as determined by the Company) to the Paying Agent at the office of
the Paying Agent prior to, on or after the Asset Disposition Purchase Date shall
be a condition to the receipt by the Holder of the Asset Disposition Purchase
Price therefor; provided, that such Asset Disposition Purchase Price shall be so
--------
paid pursuant to this Section 4.7(d) only if the Security so delivered to the
Paying Agent shall conform in all respects to the description thereof set forth
in the related Asset Disposition Purchase Notice. If at the expiration of the
Asset Disposition Purchase Offer the aggregate principal amount of Securities
surrendered by Holders exceeds the Asset Disposition Purchase Amount, the
Company or the Trustee shall select the Securities to be purchased on a pro rata
basis (with such adjustments as may be deemed appropriate by the Company so that
only Securities in denominations of $1,000, or integral multiples thereof, shall
be purchased). Holders whose Securities are purchased only in part will be
issued new Securities equal in principal amount to the unpurchased portion of
the Securities surrendered.
The Company shall purchase from the Holder thereof, pursuant to an
Asset Disposition Purchase Offer made in accordance with this Section 4.7, a
portion of a Security if the principal amount of such portion is $1,000 or an
integral multiple of $1,000. Provisions of this Indenture that apply to the
purchase of all of a Security also apply to the purchase of a portion of such
Security.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Asset Disposition Purchase Notice or written notice of withdrawal
thereof.
Upon receipt by the Paying Agent of the Asset Disposition Purchase
Notice, the Holder of the Security in respect of which such Asset Disposition
Purchase Notice was given shall (unless such Asset Disposition Purchase Notice
is withdrawn as specified in the following paragraph) thereafter be entitled to
receive solely the Asset Disposition Purchase Price with respect to such
Security (subject to proration if
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<PAGE>
Securities with an aggregate principal amount greater than the Asset Disposition
Purchase Amount are properly tendered). Such Asset Disposition Purchase Price
shall be paid to such Securityholder by the Paying Agent promptly upon the later
of (a) the first Business Day following the Asset Disposition Purchase Date
(provided the conditions in this Section 4.7(d) have been satisfied) and (b) the
first Business Day following the time of delivery of the Security to the Paying
Agent at the office of the Paying Agent by the Holder thereof in the manner
required by this Section 4.7(d).
An Asset Disposition Purchase Notice may be withdrawn before or after
delivery by the Holder to the Paying Agent at the office of the Paying Agent of
the Security to which such Asset Disposition Purchase Notice relates, by means
of a written notice of withdrawal delivered by the Holder to the Paying Agent at
the office of the Paying Agent to which the related Asset Disposition Purchase
Notice was delivered at any time prior to the close of business on the Asset
Disposition Purchase Date specifying, as applicable:
(1) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted;
(2) the principal amount of the Security (which shall be $1,000 or an
integral multiple thereof) with respect to which such notice of withdrawal
is being submitted; and
(3) the principal amount, if any, of such Security (which shall be
$1,000 or an integral multiple thereof) that remains subject to the
original Asset Disposition Purchase Notice and that has been or will be
delivered for purchase by the Company.
No later than the date upon which written notice of an Asset
Disposition Purchase Offer is delivered to the Trustee, the Company shall cause
to be irrevocably deposited with the Paying Agent, subject to the provisions of
Section 2.4, in cash or Temporary Cash Investments an amount sufficient to pay
the aggregate Asset Disposition Purchase Price, to be held for payment in
accordance with the provisions of this Section.
(e) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue thereof.
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<PAGE>
SECTION 4.8. Limitation on Transactions with Affiliates. (a) The
------------------------------------------
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, conduct any business, enter into or permit to exist any
transaction (including, without limitation, the sale, conveyance, disposition,
purchase, exchange or lease of any property, the lending the borrowing or
advancing of any money or the rendering of any services) with, or for the
benefit of, any Affiliate of the Company (an "Affiliate Transaction") unless (i)
the terms of such Affiliate Transaction are set forth in writing, (ii) such
Affiliate Transaction is in the best interest of the Company or such Restricted
Subsidiary, as the case may be, (iii) such Affiliate Transaction is on terms as
favorable to the Company or such Restricted Subsidiary, as the case may be, as
those that could be obtained at the time of such Affiliate Transaction for a
similar transaction in arm's length dealings with a Person who is not such an
Affiliate and (iv) with respect to each Affiliate Transaction involving
aggregate payments or value in excess of $[500,000], the Company delivers to the
Trustee an Officers' Certificate certifying that such Affiliate Transaction was
approved by a majority of the Board of Directors, including a majority of the
disinterested members of the Board of Directors, as evidenced by a Board
Resolution, and that such Affiliate Transaction complies with clauses (ii) and
(iii), such Board Resolution to be dated within 30 days of such Affiliate
Transaction.
(b) The provisions of Section 4.8(a) shall not prohibit (i) any
Restricted Payment permitted to be paid pursuant to Section 4.5, (ii) any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors, (iii)
loans or advances permitted under this Indenture to employees in the ordinary
course of business in accordance with past practices of the Company, (iv) the
payment of reasonable fees to directors of the Company and its Restricted
Subsidiaries who are not employees of the Company or of Restricted Subsidiaries,
(v) any transaction between the Company and a Wholly Owned Subsidiary or between
Wholly Owned Subsidiaries or (vi) reasonable and customary indemnification
arrangements between the Company or any Restricted Subsidiary and their
respective directors and officers pursuant to which the Company or any such
Restricted Subsidiary agrees to indemnify such directors and officers against
losses and expenses incurred by such directors and officers in connection with
their service to the Company or such Restricted Subsidiary, as the case may be
(to the extent that such indemnification arrangements are permitted under
applicable law).
SECTION 4.9. Change of Control. (a) Upon a Change of Control, (i)
-----------------
the Company shall notify the Trustee, who shall in turn notify the Holders, in
writing of the occurrence of the
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<PAGE>
Change of Control and shall make an offer to purchase (the "Change of Control
Offer") the Securities for cash at a purchase price equal to 101% of the
principal amount thereof plus any accrued and unpaid interest thereon
(collectively the "Change of Control Purchase Price") to the Change of Control
Purchase Date (as defined below) on or before the date specified in such notice,
which date shall be no earlier than 30 days and no later than 60 Business Days
after the occurrence of the Change of Control (the "Change of Control Purchase
Date"), (ii) the Company shall, or shall cause the Trustee to, mail a copy of
the Change of Control Offer to each Holder and (iii) the Company shall cause a
notice of the Change of Control Offer to be sent at least once to the Dow Jones
News Service and The Bloomberg Business News Service or, if such news services
no longer publish such notices, a similar business news service in the United
States. The Change of Control Offer shall remain open from the time such offer
is made until the Change of Control Purchase Date The Company shall purchase
all Securities properly tendered in the Change of Control Offer and not
withdrawn in accordance with the procedures set forth in Section 4.9(b). The
Trustee shall be under no obligation to ascertain, and the Trustee shall not be
deemed to have knowledge of, the occurrence of a Change of Control or to give
notice with respect thereto other than as provided above upon receipt of a
Change of Control Offer from the Company The Trustee may conclusively assume,
in the absence of receipt of a Change of Control Offer from the Company, that no
Change of Control has occurred. The Change of Control Offer shall include a
form of change of control purchase notice (the "Change of Control Purchase
Notice") to be completed by the Holder and shall state:
(1) the events causing a Change of Control and the date such Change of
Control is deemed to have occurred;
(2) the circumstances and relevant facts regarding such Change of
Control which the Company in good faith believes will enable Holders to
make an informed decision (which at a minimum will include (i) the most
recently filed Annual Report on Form 10-K (including audited financial
statements) of the Company, the most recent subsequently filed Quarterly
Report on Form 10-Q and any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report, (ii) a description of material
business developments in the Company's business subsequent to the date of
the latest of such Reports and (iii) information with respect to pro forma
--- -----
historical income, cash flow and capitalization, each after giving effect
to such Change of Control, events causing such Change of Control and the
date such Change of Control is deemed to have occurred);
(3) that the Change of Control Offer is being made pursuant to this
Section 4.9(a) and that all Securities
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<PAGE>
properly tendered pursuant to the Change of Control Offer will be accepted
for payment;
(4) the date by which the Change of Control Purchase Notice pursuant
to this Section 4.9 must be given;
(5) the Change of Control Purchase Date;
(6) the Change of Control Purchase Price;
(7) the name and address of the Paying Agent;
(8) that Securities must be surrendered to the Paying Agent at the
office of the Paying Agent to collect payment;
(9) that the Change of Control Purchase Price for any Security as to
which a Change of Control Purchase Notice has been duly given and not
withdrawn will be paid promptly upon the later of the first Business Day
following the Change of Control Purchase Date and the time of surrender of
such Security as described in clause (8);
(10) the procedure the Securityholder must follow to accept the Change
of Control Offer; and
(11) the procedures for withdrawing a Change of Control Purchase
Notice.
(b) A Securityholder may accept a Change of Control Offer by delivering
to the Paying Agent at the office of the Paying Agent a Change of Control
Purchase Notice at any time prior to the close of business in the location of
the office of the Paying Agent on the Change of Control Purchase Date, stating:
(1) that such Securityholder elects to have a Security purchased
pursuant to the Change of Control Offer;
(2) the principal amount of the Security that the Securityholder
elects to have purchased by the Company, which amount must be $1,000 or an
integral multiple thereof, and the certificate numbers of the Securities to
be delivered by such Securityholder for purchase by the Company; and
(3) that such Security shall be purchased on the Change of Control
Purchase Date pursuant to the terms and conditions specified in this
Indenture.
The delivery of such Security (together with all necessary
endorsements) to the Paying Agent at the office of the Paying Agent prior to, on
or after the Change of Control Purchase Date shall be a condition to the receipt
by the
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<PAGE>
Securityholder of the Change of Control Purchase Price therefor; provided, that
--------
such Change of Control Purchase Price shall be so paid pursuant to this Section
only if the Security so delivered to the Paying Agent shall conform in all
respects to the description thereof set forth in the related Change of Control
Purchase Notice. Securityholders whose Securities are purchased only in part
will be issued new Securities equal in principal amount to be unpurchased
portion of the Securities surrendered.
The Company shall purchase from the Holder thereof, pursuant to this
Section, a portion of a Security if the principal amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the Purchase of all of a Security also apply to the Purchase of a
portion of such Security.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Change of Control Purchase Notice or written notice of withdrawal
thereof.
Upon receipt by the Company of the Change of Control Purchase Notice,
the Holder of the Security in respect of which such Change of Control Purchase
Notice was given shall (unless such Change of Control Purchase Notice is
withdrawn as specified in the following paragraph) thereafter be entitled to
receive solely the Change of Control Purchase Price with respect to such
Security. Such Change of Control Purchase Price shall be paid to such Holder
promptly upon the later of (a) the first Business Day following the Change of
Control Purchase Date (provided the conditions in this Section 4.9(b) have been
satisfied) and (b) the first Business Day following the time of delivery of the
Security to the Paying Agent at the office of the Paying Agent by the Holder
thereof in the manner required by this Section 4.9(b).
A Change of Control Purchase Notice may be withdrawn before or after
delivery by the Holder to the Paying Agent at the office of the Paying Agent of
the Security to which such Change of Control Purchase Notice relates, by means
of a written notice of withdrawal delivered by the Holder to the Paying Agent at
the office of the Paying Agent to which the related Change of Control Purchase
Notice was delivered at any time prior to the close of business on the Change of
Control Purchase Date specifying, as applicable:
(1) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted;
(2) the principal amount of the Security (which shall be $1,000 or an
integral multiple thereof) with respect to which such notice of withdrawal
is being submitted; and
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<PAGE>
(3) the principal amount, if any, of such Security (which shall be
$1,000 or an integral multiple thereof) that remains subject to the
original Change of Control Purchase Notice and that has been or will be
delivered for purchase by the Company.
No later than the date upon which the Change of Control Offer is
delivered to the Trustee, the Company shall irrevocably deposit with the Paying
Agent, subject to the provisions of Section 2.4, in cash or Temporary Cash
Investments an amount equal to the Change of Control Purchase Price to the
Holders entitled thereto, to be held for payment in accordance with the
provisions of this Section.
(c) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue thereof.
SECTION 4.10. Compliance Certificate. The Company shall deliver to
----------------------
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA (S) 314(a)(4).
SECTION 4.11. Further Instruments and Acts. Upon request of the
----------------------------
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.12. Limitation on Liens. The Company shall not, and shall
-------------------
not permit any Restricted Subsidiary to, directly or indirectly, create or
permit to exist any Lien (other than Permitted Liens) on any of its property or
assets (including Capital Stock), whether owned on the Issue Date or thereafter
acquired, or any right, title or interest thereto, unless the Company or such
Restricted Subsidiary shall secure all payments hereunder and under the
Securities on an equal and ratable basis with the obligation so secured until
such time as such obligation is no longer secured by a Lien.
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SECTION 4.13. Limitation on Sale/Leaseback Transactions. The Company
-----------------------------------------
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, enter into, Guarantee or otherwise become liable with respect to any
Sale/Leaseback Transaction with respect to any property or assets unless (i) the
Company or such Restricted Subsidiary, as the case may be, would be entitled
under Section 4.3(b)(vii) to incur Indebtedness secured by a Permitted Lien on
such property or assets in an amount equal to the Attributable Indebtedness with
respect to such Sale/Leaseback Transaction, (iii) the net cash proceeds from
such Sale/Leaseback Transaction are at least equal to the Fair Market Value of
the property or assets subject to such Sale/Leaseback Transaction (such Fair
Market Value determined, in the event such property or assets have a Fair Market
Value in excess of $2,000,000, no more than 30 days prior to the effective date
of such Sale/Leaseback Transaction, by the Board of Directors including a
majority of the disinterested members of the Board of Directors, as evidenced by
a Board Resolution), and (iv) the net cash proceeds of such Sale/Leaseback
Transaction are applied in accordance with Section 4.7.
SECTION 4.14. Limitation on Issuance and Sale of Capital Stock of
---------------------------------------------------
Restricted Subsidiaries. The Company shall not permit (i) any Restricted
- -----------------------
Subsidiary to issue any Capital Stock other than to the Company or a Wholly
Owned Subsidiary; or (ii) any Person (other than the Company or a Wholly Owned
Subsidiary) to, directly or indirectly, own or control any Capital Stock of any
Restricted Subsidiary (other than directors' qualifying shares); provided,
--------
however, that clauses (i) and (ii) shall not prohibit (a) any sale of 100% of
- -------
the shares of the Capital Stock of any Restricted Subsidiary owned by the
Company or any Wholly Owned Subsidiary effected in accordance with Section 4.7,
or (b) any issuance of Preferred Stock of a Restricted Subsidiary to any Person
permitted under Section 4.4.
SECTION 4.15. Restricted and Unrestricted Subsidiaries. (a) The
----------------------------------------
Board of Directors may designate any Subsidiary of the Company or any Restricted
Subsidiary to be an Unrestricted Subsidiary if (i) the Subsidiary to be so
designated does not own any Capital Stock, Redeemable Stock or Indebtedness of,
or own or hold any Lien on any property or assets of, the Company or any other
Restricted Subsidiary, (ii) the Subsidiary to be so designated is not obligated
by any Indebtedness or Lien that, if in default, would result (with the passage
of time or notice or otherwise) in a default on any Indebtedness of the Company
or any Restricted Subsidiary, and (iii) either (A) the Subsidiary to be so
designated has total assets of $1,000 or less or (B) such designation is
effective immediately upon such Person becoming a Subsidiary of the Company or
of a Restricted Subsidiary. Unless so designated as an Unrestricted Subsidiary,
any Person that becomes a Subsidiary of the Company or any Restricted Subsidiary
shall be classified
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as a Restricted Subsidiary. Except as provided in the first sentence of this
paragraph (a), no Restricted Subsidiary shall be redesignated as an Unrestricted
Subsidiary. Subject to Section 4.15(b), an Unrestricted Subsidiary shall not be
redesignated as a Restricted Subsidiary. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complies with the
foregoing provisions.
[(b) The Company shall not, and shall not permit any Restricted
Subsidiary to, take any action or enter into any transaction or series of
transactions that would result in a Person becoming a Restricted Subsidiary
(whether through an acquisition, the redesignation of an Unrestricted Subsidiary
or otherwise) unless after giving effect to such action, transaction or series
of transactions, on a pro forma basis, (i) the Company could incur at least
$1.00 of additional Indebtedness pursuant to Section 4.3(b)(iii), (ii) such
Restricted Subsidiary could then Incur under Section 4.4 all Indebtedness as to
which it is obligated at such time, (iii) no Default or Event of Default would
occur or be continuing and (iv) there exist no Liens with respect to the
property or assets of such Restricted Subsidiary other than Permitted Liens.]
SECTION 4.16. Revisions to Schedules. Schedule III shall be revised
----------------------
from time to time by the Company to accurately reflect all the U.S. Restricted
Subsidiaries, whether now existing or hereafter created, formed, designated or
acquired, and upon such revision a new Schedule III shall be delivered to the
Trustee.
SECTION 4.17. Maintenance of Properties; Insurance. The Company
------------------------------------
shall, and shall cause each Restricted Subsidiary to, at all times:
(a) maintain all property and assets necessary in its business in
good working order and condition (ordinary wear and tear excepted), in
compliance with applicable regulations, laws or restrictions and supplied
with all necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all
as in the judgment of the Company may be necessary so its business may be
properly and advantageously conducted at all times; and
(b) maintain with recognized national or international insurance
companies, or through self-insurance programs, insurance on such of its
property and assets, and against such liabilities in at least such amounts,
against at least such risks and with such deductibles or self-insured
retentions as in each case are
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<PAGE>
customarily insured against in the same general area by companies engaged
in the same or a similar business and consistent with the past practices of
the Company, and furnish to the Trustee an Officers' Certificate specifying
the nature of the insurance carried and adequacy thereof at such times as
it shall deliver to the Trustee an Officers' Certificate pursuant to
Section 4.10.
SECTION 4.18. Corporate Existence. Subject to Article 5, the Company
-------------------
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and the corporate, partnership or other
existence of each of its Subsidiaries, in accordance with the respective
organizational documents of the Company and each such Subsidiary and the rights
(charter and statutory), registrations, licenses and franchises of the Company
and such Subsidiaries; provided, however, that the Company shall not be required
-------- -------
to preserve any such right, license, registration or franchise, or the
corporate, partnership or other existence of any such Subsidiary, if the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries taken as a whole, and the loss thereof is not
adverse in any material respect to the Holders; provided, further, however, that
-------- ------- -------
if such Subsidiary has more than a de minimis amount of assets, the Board of
-- -------
Directors shall be required to make a determination to the foregoing effect.
SECTION 4.19. Taxes. The Company shall, and shall cause each of its
-----
Subsidiaries to, pay, prior to delinquency, all taxes, assessments and
governmental levies, except as the same are being contested in good faith and by
appropriate proceedings or where the failure to pay would not have a material
adverse effect on the Company and its Subsidiaries taken as a whole
SECTION 4.20. Conflicting Agreements. The Company shall not, and
----------------------
shall not permit any of its Subsidiaries to, enter into any agreement or
instrument, other than the Senior Indenture, that by its terms expressly (i)
prohibits the Company from making any payments on the Securities required by the
terms hereof and thereof or (ii) making any Asset Disposition Purchase Offer or
Change of Control Offer, pursuant to Section 4.7 or 4.9, respectively.
ARTICLE 5
SUCCESSOR COMPANY
-----------------
The Company shall not, and the Company shall not permit any Restricted
Subsidiary to, enter into any transaction or series of transactions to
consolidate, amalgamate or merge
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<PAGE>
with or into any other Person (other than the merger of a Wholly Owned
Subsidiary (i) with another Wholly Owned Subsidiary or (ii) into the Company),
or directly or indirectly through its Subsidiaries sell, convey, assign,
transfer, lease or otherwise dispose of all or substantially all its property
and assets to any Person (other than to one or more Wholly Owned Subsidiaries or
to the Company) unless (i) if the Company is a party to such transaction and is
not the surviving entity (the "Surviving Entity"), the Person formed by such
consolidation or amalgamation or into which the Company is merged or that
acquires, by sale, conveyance, assignment, transfer, lease or other disposition,
all or substantially all the properties and assets of the Company as an
entirety, shall be a corporation organized and validly existing under the laws
of the United States or any State thereof or the District or Columbia and shall
expressly assume (a) by a supplemental indenture executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the obligations of the Company
pursuant to the Securities and the Indenture and (b) by written instruments
executed and delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under any agreements entered into by the Company
to effectuate the provisions of Section 4.12 hereof; (ii) the Surviving Entity,
if any Restricted Subsidiary is a party to such transaction and is not the
Surviving Entity, shall by written instruments executed and delivered to the
Trustee, in form satisfactory to the Trustee, expressly assume all the
obligations of such Restricted Subsidiary under any agreements entered into by
such Restricted Subsidiary to effectuate the terms of Section 4.12 hereof; (iii)
immediately before and after giving effect to such transaction or series of
transactions on a pro forma basis (and treating any Indebtedness which becomes
--- -----
an obligation of the Company, the Surviving Entity or any Restricted Subsidiary
as a result of such transaction or series of transactions as having been
incurred by the Company, such Surviving Entity or such Restricted Subsidiary at
the time of such transaction or series of transactions) no Default or Event of
Default shall have occurred and be continuing; (iv) immediately after giving
effect to such transaction or series of transactions on a pro forma basis (and
--- -----
treating any Indebtedness which becomes an obligation of the Company, the
Surviving Entity or any Restricted Subsidiary as a result of such transaction or
series of transactions as having been incurred by the Company, such Surviving
Entity or such Restricted Subsidiary at the time of such transaction or series
of transactions), the Company or the Surviving Entity, as the case may be, could
incur at least $1.00 of additional Indebtedness pursuant to Section 4.3(b)(iii);
(v) immediately after giving effect to such transaction or series of
transactions on a pro forma basis (and treating any Indebtedness which becomes
--- -----
an obligation of the Company, the Surviving Entity or any Restricted Subsidiary
as a result of such transaction or series of transactions as having been
incurred by the Company, such Surviving Entity or such Restricted Subsidiary at
the time
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of such transaction or series of transactions), the Company or the Surviving
Entity, as the case may be, shall have a [Consolidated Tangible Net Worth] which
is not less than the [Consolidated Tangible Net Worth] of the Company
immediately prior to such transaction or transactions; and (vi) the Company
shall have delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating (A) that such consolidation, amalgamation, merger or
transfer and such supplemental indenture (if any) and written instrument (if
any) comply with this Indenture and (B) that upon execution and delivery of such
supplemental indenture or written instrument the Company or such Surviving
Entity shall be bound by the terms of this Indenture as thereby amended and this
Indenture as thereby amended shall be enforceable against the Company or such
Successor Entity in accordance with its terms.
Upon any transaction involving the Company in which the Company is not
the Surviving Entity, such Surviving Entity shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture, but the Company in the case of a transfer or lease shall not be
released from the obligation to pay the principal of, and premium, if any, or
interest on, the Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
---------------------
SECTION 6.1. Events of Default. An "Event of Default" occurs if:
-----------------
(1) the Company fails to make any payment of interest on any Security
when the same shall become due and payable, and such failure continues for
a period of 30 days;
(2) the Company (i) fails to make the payment of the principal of or
premium, if any, on any Security when the same becomes due and payable at
its Stated Maturity, upon acceleration, redemption or declaration, or
otherwise or (ii) fails to redeem or purchase Securities when and to the
extent required pursuant to this Indenture or the Securities;
(3) the Company fails to comply with Article 5;
(4) the Company fails to comply with Section 4.2, 4.3, 4.4, 4.5, 4.6,
4.7, 4.8, 4.9, 4.12, 4.13, 4.14 or 4.20 (other than a failure to purchase
Securities when required under Section 4.7 or 4.9) and such failure
continues for 30 days after the notice specified below, or the Company
fails to give the notice specified below;
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(5) the Company fails to comply with any of its agreements in the Securities
or this Indenture (other than those referred to in (1), (2), (3) or (4)
above) and such failure continues for a period of 60 days after the notice
specified below or the Company fails to give the notice specified below;
(6) Principal of or interest on any Indebtedness of the Company or any
Restricted Subsidiary for borrowed money is not paid when due within any
applicable grace period or any Indebtedness of the Company or any
Restricted Subsidiary is accelerated by the Holders thereof, in each case,
if the total amount so unpaid when due within any applicable grace period
or accelerated exceeds $7,500,000 or its Dollar Equivalent at the time;
(7) one or more judgments or decrees aggregating in excess of
$7,500,000 or its Dollar Equivalent at the time is rendered against the
Company or any Restricted Subsidiary and is not discharged and either: (A)
an enforcement proceeding has been commenced by any creditor upon such
judgment or decree; or (B) there is a period of 60 days following the entry
of such judgment or decree during which such judgment or decree is not
discharged, waived or the execution thereof stayed;
(8) the Company or any Restricted Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(9) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted Subsidiary
in an involuntary case;
(B) appoints a Custodian of the Company or any Restricted
Subsidiary or for any substantial part of its property; or
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(C) orders the winding up or liquidation of the Company or any
Restricted Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days.
The foregoing will constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by reason of the provisions of Article IX of this Indenture or by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.
The term "Bankruptcy Law" means Title 11, United States Code, or any
------------------
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4) or (5) above is not an Event of Default
until the Trustee or the Holders of at least 25% in principal amount of the
Securities notify the Company of the Default and the Company does not cure such
Default within the time specified after receipt of such notice. Such notice
must specify the Default, demand that it be remedied and state that such notice
is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which with the giving of notice and the lapse of time would become an
Event of Default under clause (4), (5), (6) or (7) above, its status and what
action the Company is taking or proposes to take with respect thereto.
SECTION 6.2. Acceleration. If an Event of Default (other than an
------------
Event of Default specified in Section 6.1(8) or (9) with respect to the Company)
occurs and is continuing, the Trustee by notice to the Company, or the Holders
of at least 25% in principal amount of the Securities by notice to the Trustee
(who shall promptly notify the Company), may declare the principal of and
accrued interest on all the Securities to be due and payable. Upon such a
declaration, such principal and interest shall be due and payable immediately.
If an Event of Default specified in Section 6.1(8) or (9) occurs, the principal
of and interest on all the Securities shall ipso facto become and be immediately
---- -----
due and payable without any declaration or other act on the part of the Trustee
or any Securityholders. The Holders of a majority in principal amount of the
Securities by notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any
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judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely
because of acceleration. No such rescission shall affect any subsequent Default
or impair any right consequent thereto.
SECTION 6.3. Other Remedies. If an Event of Default occurs and is
--------------
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.4. Waiver of Past Defaults. The Holders of a majority in
-----------------------
principal amount of the Securities by notice to the Trustee may waive an
existing Default or Event of Default and its consequences except (i) a Default
or Event of Default in the payment of the principal (other than principal due by
reason of acceleration) of or interest on a Security or (ii) a Default in
respect of a provision that under Section 9.2 cannot be amended or waived
without the consent of each Securityholder affected. When a Default or Event of
Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.
SECTION 6.5. Control by Majority. The Holders of a majority in
-------------------
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or by
exercising any trust or power conferred on the Trustee. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.1, that the Trustee determines is unduly prejudicial to the
rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
-------- -------
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
SECTION 6.6. Limitation on Suits. A Securityholder may not pursue
-------------------
any remedy with respect to this Indenture or the Securities unless:
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(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the
Securities make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the
Securities do not give the Trustee a direction inconsistent with the
request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.7. Rights of Holders To Receive Payment. Notwithstanding
------------------------------------
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Securities held by such Holder, on
or after the respective due dates expressed in the Securities, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
SECTION 6.8. Collection Suit by Trustee. If an Event of Default in
--------------------------
payment of interest or principal specified in Section 6.1(1) or (2) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount of principal and
interest remaining unpaid (together with interest on such unpaid interest to the
extent lawful) and the amounts provided for in Section 7.7.
SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may file
--------------------------------
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making
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of such payments directly to the Holders, to pay to the Trustee any amount due
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and its counsel, and any other amounts due the Trustee under
Section 7.7.
SECTION 6.10. Priorities. If the Trustee collects any money or
----------
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
---------------------
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more
than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
--------------------------------
extent it may lawfully refrain from doing so) shall not at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and shall not hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
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ARTICLE 7
TRUSTEE
-------
SECTION 7.1. Duties of Trustee. (a) If an Event of Default has
-----------------
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of
Default:
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, in the
case of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall examine
the certificates and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the accuracy
of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that: (1) this paragraph does not limit the effect of paragraph (b) of
this Section; (2) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and (3) the Trustee shall not be
liable with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company.
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(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.2. Rights of Trustee. (a) The Trustee may rely on any
-----------------
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
-------- -------
misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
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SECTION 7.4. Trustee's Disclaimer. The Trustee
--------------------
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in the Indenture or in any document
issued in connection with the sale of the Securities or in the Securities other
than the Trustee's certificate of authentication.
SECTION 7.5. Notice of Defaults. If a Default occurs and is
------------------
continuing and if it is known to a Trust Officer of the Trustee, the Trustee
shall mail to each Securityholder notice of the Default within 90 days after it
occurs. Except in the case of a Default in payment of principal of or interest
on any Security (including payments pursuant to the mandatory redemption
provisions of such Security, if any), the Trustee may withhold the notice if and
so long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
SECTION 7.6. Reports by Trustee to Holders. If required by TIA (S)
-----------------------------
313(a), as promptly as practicable after each May 15 beginning with the May 15
following the date of this Indenture, and in any event prior to July 15 in each
year, the Trustee shall mail to each Securityholder a brief report dated as of
May 15 that complies with TIA (S) 313(a). The Trustee also shall comply with TIA
(S) 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.7. Compensation and Indemnity. The Company shall pay to
--------------------------
the Trustee from time to time such compensation as shall be agreed to in writing
between the Company and the Trustee for its services. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, sale or otherwise in connection with this Indenture, in addition to
the compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts and court costs. The Company shall indemnify
the Trustee against any and all loss, liability damage, claim or expense
(including reasonable attorneys' fees and expenses), including taxes (other than
taxes based on the income of the Trustee) incurred by it in connection with the
acceptance or administration of this trust
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and the performance of its duties hereunder. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee may
have separate counsel and the Company shall pay the fees and expenses of such
counsel. The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on Securities under Article 8 or otherwise.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.1(8) or (9) with respect to
the Company, the expenses are intended to constitute expenses of administration
under Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. The Trustee may resign at any
----------------------
time by so notifying the Company. The Holders of a majority in principal amount
of the Securities may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
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A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.7.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
25% in principal amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
SECTION 7.9. Successor Trustee by Merger. If the Trustee
---------------------------
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking
association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
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SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
-----------------------------
times satisfy the requirements of TIA (S) 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. No obligor upon the Securities or
Person directly controlling, controlled by or under common control with such
obligor shall serve as Trustee upon the Securities. The Trustee shall comply
with TIA (S) 310(b); provided, however, that there shall be excluded from the
-------- -------
operation of TIA (S) 310(b) (1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA (S) 310(b) (1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
-------------------------------------------------
Trustee shall comply with TIA (S) 311(a), excluding any creditor relationship
listed in TIA (S) 311(b). A Trustee who has resigned or been removed shall be
subject to TIA (S) 311(a) to the extent indicated.
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
----------------------------------
SECTION 8.1. Discharge of Liability on Securities; Defeasance. (a)
------------------------------------------------
When (i) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.7) for cancellation or (ii) all
outstanding Securities have become due and payable, whether at maturity or as a
result of the mailing of a notice of redemption pursuant to Article 3 hereof,
and the Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Securities, including interest
thereon (other than Securities replaced pursuant to Section 2.7), and if in
either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Sections 8.1(c) and 8.6, cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of
this Indenture on demand of the Company accompanied by an Officers' Certificate
and an Opinion of Counsel and at the cost and expense of the Company.
(b) Subject to Sections 8.1(c), 8.2 and 8.6, the Company at any time
may terminate (i) all its obligations under the Securities and this Indenture
("legal defeasance option") or (ii) its obligations under Sections 4.2 (to the
extent that the failure to comply with Section 4.2 shall not violate the TIA),
4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.12, 4.13 and 4.14, Article 5 and the
related operation of Sections 6.1(3), (4) and (5) and the operation with respect
to Restricted Subsidiaries of Sections 6.1(6), (7), (8) and (9) ("covenant
defeasance
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option"). The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default. If the Company
exercises its covenant defeasance option, payment of the Securities may not be
accelerated because of an Event of Default specified in Sections 6.1(3), (4) or
(5) or an Event of Default with respect to a Restricted Subsidiary specified in
Sections 6.1(b), (7), (8) or (9).
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b), the Company's obligations in
Sections 2.3, 2.4, 2.5, 2.6, 2.7, 7.7, 7.8, 8.4, 8.5 and 8.6 shall survive until
the Securities have been paid in full. Thereafter, the Company's obligations in
Sections 7.7, 8.4, 8.5 and 8.6 shall survive.
SECTION 8.2. Conditions to Defeasance. The Company may exercise its
------------------------
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money or
U.S. Government Obligations for the payment of principal and interest on
the Securities to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a nationally
recognized firm of independent accountants expressing their opinion that
the payments of principal and interest when due and without reinvestment on
the deposited U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as will be
sufficient to pay principal and interest when due on all the Securities to
maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 6.1(8) or (9) with respect to the
Company occurs which is continuing at the end of the period;
(4) no Default has occurred and is continuing on the date of such
deposit and after giving effect thereto;
(5) the deposit does not constitute a default under any other agreement
binding on the Company;
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<PAGE>
(6) the Company delivers to the Trustee an Opinion of Counsel to the effect
that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940;
(7) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from the Internal Revenue Service a ruling or (ii) since the
date of this Indenture there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Securityholders will not
recognize income, gain or loss for Federal income tax purposes as a result
of such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such defeasance had not occurred;
(8) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders will not recognize income, gain or loss for Federal income
tax purposes as a result of such covenant defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred; and
(9) the Company delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities as contemplated by this Article
8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.3. Application of Trust Money. The Trustee shall hold in
--------------------------
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
SECTION 8.4. Repayment to Company. The Trustee and the Paying Agent
--------------------
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
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<PAGE>
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.5. Indemnity for Government Obligations. The Company shall
------------------------------------
pay and shall indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against deposited U.S. Government Obligations or the principal
and interest received on such U.S. Government Obligations.
SECTION 8.6. Reinstatement. If the Trustee or Paying Agent is unable
-------------
to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8.
ARTICLE 9
SUBORDINATION
-------------
SECTION 9.1. Securities Subordinated to Senior Indebtedness. The
----------------------------------------------
Company, for itself and its successors, and each Holder, by its acceptance of
Securities, agrees that, notwithstanding anything to the contrary in Sections
6.1 and 6.2 hereof, the payment of the principal of, interest on or any other
amounts due on the Securities is subordinated in right of payment, to the extent
and in the manner provided in this Article 9, to the prior payment in full of
all Senior Indebtedness. Each Holder by its acceptance of the Securities
authorizes and directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate, as between the holders of Senior
Indebtedness and such Holder, the subordination provided in this Article 9.
The expressions "prior payment in full," "payment in full" and "paid in
full" and any other similar term or phrase when used in this Article 9 with
respect to Senior Indebtedness shall mean the payment in full of such Senior
Indebtedness in cash or provision for such payment in cash or otherwise in a
manner satisfactory to the holders of the Senior Indebtedness.
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<PAGE>
This Article 9 shall constitute a continuing offer to all persons who,
in reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Senior Indebtedness, and such holders are made obligees hereunder and they
and/or each of them may enforce such provisions to the extent and in the manner
provided herein.
SECTION 9.2. No Payment on Securities in Certain Circumstances. (a)
-------------------------------------------------
No direct or indirect payment (in cash, property, securities, by set-off or
otherwise) shall be made or agreed to be made on account of the principal of,
premium (if any) or interest on the Securities, or in respect of any redemption,
retirement, defeasance, purchase or other acquisition of any of the Securities,
and no Holder of any Security shall be entitled to receive any such payment (any
of the foregoing payments or actions being referred to in this Section 9.2 as a
"Payment"), on or after the occurrence of any default in the payment of
principal or interest then due and payable in respect of any Senior Indebtedness
(either at maturity, upon redemption, by acceleration or otherwise), unless and
until such default has been waived or cured or all amounts then due and payable
for principal of and interest on all Senior Indebtedness shall have been paid in
full or provision therefor in cash, in cash equivalents, or in accordance with
the terms of such Senior Indebtedness and the agreements, if any, under which
such Senior Indebtedness was issued or created, shall have been made.
(b) The Company may not make any Payment if:
(i) a default or event of default under any agreement governing
Senior Indebtedness (other than a default or event of default relating to
payment of principal or interest, either at maturity, upon redemption, by
declaration or otherwise) has occurred and is continuing that permits the
holders of such Senior Indebtedness to accelerate its maturity (whether or
not such acceleration has occurred); and
(ii) the Company or the Trustee receives a notice of such default
or event of default from (i) the holders of a majority of the outstanding
principal amount of Indebtedness under the Senior Indentures or (ii) the
trustee representing such holders under the Senior Indenture; provided,
--------
however, that only one such notice shall be given effect within any period
-------
of 360 consecutive days; provided, further, that no more than one notice
-------- -------
may be given with respect to any continuing default or event of default.
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<PAGE>
Notwithstanding the provisions of this Section 9.2(b), the Company may make
Payments on the Securities when:
(1) all defaults and events of default referred to in such
notice are cured or waived; or
(2) 179 days pass after such notice is given, with respect
to such defaults and/or events of default
so long as this Article 9 (including, without limitation, Section 9.2(a))
otherwise permits a Payment at that time.
(c) In the event that notwithstanding the provisions of this Section
9.2 the Company shall make any Payment to the Trustee or any Holder of the
Securities on account of the principal of or interest on the Securities after
receiving notice (as aforesaid) of the happening of a default or event of
default on Senior Indebtedness, then, unless and until such default or event of
default shall have been cured or waived or shall have ceased to exist either due
to the passage of time as aforesaid in Section 9.2(b)(ii)(2) or otherwise, such
payment (subject to the provisions of Sections 9.6 and 9.7) shall be held by the
Trustee or such Holder, in trust for the benefit of, and subject to Sections 9.6
and 9.7, shall be paid forthwith over and delivered to, the holders of Senior
Indebtedness (pro rata as to each of such holders on the basis of the respective
--------
amounts of Senior Indebtedness then in default held by them) or the trustee
under the Senior Indenture, as their respective interests may appear, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full in accordance with its
terms, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Indebtedness.
The Company shall give prompt written notice to the Trustee of any
default in the payment of principal of or interest on any Senior Indebtedness or
a default which results in the acceleration of such Senior Indebtedness under
the Senior Indenture or under any agreement pursuant to which Senior
Indebtedness has been issued.
SECTION 9.3. Securities Subordinated to Prior Payment of All Senior
------------------------------------------------------
Indebtedness on Dissolution, Liquidation or Reorganization of Company. Upon any
- ---------------------------------------------------------------------
distribution or payment of assets or securities of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company of any
kind or character (whether voluntary or involuntary, in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or otherwise):
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<PAGE>
(a) the holders of all Senior Indebtedness shall first be entitled to
receive payment in full (or to have such payment duly provided for) of the
principal thereof and interest due thereon and other amounts due in
connection therewith before the Holders are entitled to receive any payment
or distribution of any assets (other than Capital Stock of the Company) on
account of the principal of or interest on the Securities;
(b) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the Holders or
the Trustee on behalf of the Holders would be entitled except for the
provisions of this Article 9, including any such payment or distribution
which may be payable or deliverable by reason of the payment of any other
Indebtedness of the Company being subordinated to the payment of the
Securities, shall be paid by the liquidating trustee or agent or other
person making such payment or distribution directly to the holders of
Senior Indebtedness or the trustee under the Senior Indenture, (pro rata as
--------
to each such holder or trustee on the basis of the respective amounts of
unpaid Senior Indebtedness held or represented by each), to the extent
necessary to make payment in full of all Senior Indebtedness remaining
unpaid except that Holders of the Securities shall be entitled to receive
securities that are subordinated to Senior Indebtedness to at least the
same degree as the Securities; and
(c) in the event that notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, including any such payment or distribution
which may be payable or deliverable by reason of the payment of any other
Indebtedness of the Company being subordinated to the payment of the
Securities, shall be received by the Trustee or the Holders or any Paying
Agent (or, if the Company is acting as its own Paying Agent, money for any
such payment or distribution shall be segregated or held in trust) on
account of principal of or interest on the Securities before all Senior
Indebtedness is paid in full, such payment or distribution (subject to the
provisions of Sections 9.6 and 9.7) shall be received and held in trust for
and shall be paid forthwith over and delivered to the holders of the Senior
Indebtedness remaining unpaid or unprovided for or the trustee under the
Senior Indenture (pro rata as to each of such holders on the basis of the
--- ----
respective amounts of Senior Indebtedness held by them), for application to
the payment of such Senior Indebtedness until all such Senior Indebtedness
shall have been paid in full, after giving effect to any concurrent payment
or distribution or provision thereof or to or for the holders of such
Senior Indebtedness, except that Holders of the
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Securities shall be entitled to receive securities that are subordinated to
Senior Indebtedness to at least the same extent as the Securities.
The Company shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Company or any
assignment for the benefit of the Company's creditors.
SECTION 9.4. Securityholders To Be Subrogated to Rights of Holders of
--------------------------------------------------------
Senior Indebtedness. Subject to the payment in full of all Senior Indebtedness
- -------------------
pursuant to this Article 9, the Holders of Securities shall be subrogated
equally and ratably to the rights of the holders of Senior Indebtedness to
receive payments or distributions of assets of the Company applicable to the
Senior Indebtedness until all amounts owing on the Securities shall be paid in
full, and for the purpose of such subrogation no such payments or distributions
to the holders of Senior Indebtedness by or on behalf of the Company or by or on
behalf of the Holders by virtue of this Article 9 which otherwise would have
been made to the Holders shall, as among the Company, its creditors other than
holders of the Senior Indebtedness and the Holders, be deemed to be payment by
the Company to or on account of the Senior Indebtedness, it being understood
that the provisions of this Article 9 are and are intended solely for the
purpose of defining the relative rights of the Holders, on the one hand, and the
holders of Senior Indebtedness, on the other hand.
SECTION 9.5. Obligations of the Company
--------------------------
Unconditional. Nothing contained in this Article 9 or elsewhere in this
- -------------
Indenture or in any Security is intended to or shall impair, as among the
Company, its creditors other than holders of the Senior Indebtedness and the
Holders, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders the principal amount of and other interest (including, to the
extent lawful, any interest on overdue installments of interest) on the
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Company other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or any
Holders from exercising all remedies otherwise permitted by applicable law upon
Default under this Indenture, subject to the rights, if any, under this Article
9 of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy. Upon
any distribution of assets of the Company referred to in this Article 9, the
Trustee, subject to the provisions of Sections 7.1 and 7.2, and the Holders
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding up, liquidation,
reorganization or similar proceedings are pending, or a
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<PAGE>
certificate of the liquidating trustee or agent or other person making any
distribution to the Trustee or to the Holders, for the purpose of ascertaining
the persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 9.
SECTION 9.6. Trustee and Paying Agent Entitled To Assume Payments Not
--------------------------------------------------------
Prohibited in Absence of Notice. The Trustee and Paying Agent shall not at any
- -------------------------------
time be charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or by the Trustee or the Paying Agent or
the taking of any other action under this Article 9 by the Trustee unless and
until the Trustee or the Paying Agent shall have received written notice thereof
from the Company or from one or more holders of Senior Indebtedness or from the
trustee under the Senior Indenture and, prior to the receipt of any such written
notice, the Trustee and Paying Agent, subject to the provisions of Sections 7.1
and 7.2, shall be entitled in all respects conclusively to assume that no such
facts exist.
SECTION 9.7. Application by Trustee of Monies Deposited With It.
--------------------------------------------------
Subject to Article 8, any deposit of monies by the Company with the Trustee or
any Paying Agent (whether or not in trust) for the payment of the principal of
or interest on any Securities shall be subject to the provisions of Sections
9.1, 9.2, 9.3 and 9.4, except that, prior to the date on which by the terms of
this Indenture any such monies may become payable for any purpose (including,
without limitation, the payment of either the principal of or the other interest
on any Security), the Trustee shall not have received with respect to such
monies the notice provided for in Section 9.6, then the Trustee or the Paying
Agent shall have full power and authority to receive such monies and to apply
the same to the purpose for which they were received. This Section shall be
construed solely for the benefit of the Trustee and Paying Agent and nothing
herein shall be construed to relieve any Holders from the duties imposed upon
them under Section 9.3(c) with respect to monies received in violation of the
provisions of this Article 9. The foregoing shall not apply if the Company acts
as its own Paying Agent.
SECTION 9.8. Subordination Rights Not Impaired by
------------------------------------
Acts or Omissions of Company or Holders of Senior Indebtedness. No right of any
- --------------------------------------------------------------
present or future holders of any Senior Indebtedness to enforce subordination as
provided herein shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms of this Indenture, regardless of any knowledge thereof which any
such holder may have or be otherwise charged with. The holders of Senior
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<PAGE>
Indebtedness may extend, renew, modify or amend the terms of the Senior
Indebtedness or any security therefor and release, sell or exchange such
security and otherwise deal freely with the Company, all without affecting the
liabilities and obligations of the parties to the Indenture or the Holders. No
provision in any supplemental indenture which modifies this Article 9 or
otherwise affects the superior position of the holders of the Senior
Indebtedness shall be effective against the holders of the Senior Indebtedness
who have not consented thereto.
SECTION 9.9. Securityholders Authorize Trustee To Effectuate
-----------------------------------------------
Subordination of Securities. Each Holder by its acceptance of Securities
- ---------------------------
authorizes and expressly directs the Trustee on its behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article 9 and to protect the rights of the Holders pursuant to this
Indenture and appoints the Trustee its attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or any other similar remedy or otherwise) tending towards liquidation
of the business and assets of the Company, the immediate filing of a claim for
the unpaid balance of its Securities in the form required in said proceedings
and causing said claim to be approved. If the Trustee does not file a proper
claim or proof of debt in the form required in such proceeding prior to 30 days
before the expiration of the time to file such claim or claims, then the holders
of Senior Indebtedness are hereby authorized to file an appropriate claim for
and on behalf of the Holders. In the event of any such proceeding, until the
Senior Indebtedness is paid in full in accordance with Section 9.3 (or adequate
provision made for such payment), without the consent of the holders of a
majority in aggregate principal amount outstanding of Senior Indebtedness, no
Holder shall waive, settle or compromise any such claim or claims relating to
the Securities that such Holder now or hereafter may have against the Company.
SECTION 9.10. Right of Trustee and Paying Agent To Hold Senior
------------------------------------------------
Indebtedness. The Trustee and the Paying Agent, in their individual capacities,
- ------------
shall be entitled to all of the rights set forth in this Article 9 in respect of
any Senior Indebtedness at any time held by either of them to the same extent as
any other holder of Senior Indebtedness, and nothing in this Indenture shall be
construed to deprive the Trustee or the Paying Agent of any of its rights as
such holder.
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<PAGE>
SECTION 9.11. Article 9 Not To Prevent Events of Default. The failure
------------------------------------------
to make a payment on account of principal of or other interest (including any
interest on overdue installments of interest and defaulted interest) on the
Securities by reason of any provision of this Article 9 shall not be construed
as preventing the occurrence of an Event of Default under Section 6.1.
SECTION 9.12. No Fiduciary Duty Created to Holders of Senior
----------------------------------------------
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
- ------------
holders of Senior Indebtedness by virtue of the provisions of this Article 9.
ARTICLE 10
AMENDMENTS AND WAIVERS
----------------------
SECTION 10.1. Without Consent of Holders. The Company and the Trustee
--------------------------
may amend this Indenture or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in place
of certificated Securities; provided, however, that the uncertificated
-------- -------
Securities are issued in registered form for purposes of Section 163(f) of
the Code or in a manner such that the uncertificated Securities are
described in Section 163(f)(2)(B) of the Code;
(4) to add Guarantees with respect to the Securities or to secure the
Securities;
(5) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(6) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
(7) to provide for the acceptance of appointment hereunder by a
successor Trustee; or
(8) to make any change that does not adversely affect the rights of any
Securityholder.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice
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<PAGE>
briefly describing such amendment. The failure to give such notice to all
Securityholders, or any defect therein, shall not impair or affect the validity
of an amendment under this Section.
SECTION 10.2. With Consent of Holders. The Company and the Trustee
-----------------------
may amend this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in principal
amount of the Securities. In addition, the Holders of at least a majority in
principal amount of the Securities by written notice to the Trustee may waive
future compliance by the Company with any provision of this Indenture or the
Securities. However, without the consent of each Securityholder affected, an
amendment or waiver may not:
(1) reduce the percentage of principal amount of Securities whose
Holders must consent to an amendment or waiver;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption of any Security or
change the time at which any Security may be redeemed in accordance with
Article 3;
(5) make any Security payable in money other than that stated in the
Security;
(6) impair the right of any Securityholder to institute suit for
enforcement of any payment on or with respect to any Security; or
(7) make any change in Section 6.4 or 6.7 or the second sentence of
this Section which adversely affects the rights of any Securityholder.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment or waiver, but
it shall be sufficient if such consent approves the substance thereof.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such amendment
or waiver. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment or
waiver under this Section.
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<PAGE>
SECTION 10.3. Compliance with Trust Indenture Act. Every amendment to
-----------------------------------
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 10.4. Revocation and Effect of Consents and Waivers. A
---------------------------------------------
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any
such Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment or waiver becomes effective. After
an amendment or waiver becomes effective, it shall bind every Securityholder.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 10.5. Notation on or Exchange of Securities. If an amendment
-------------------------------------
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 10.6. Trustee To Sign Amendments. The Trustee shall sign any
--------------------------
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.1) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that (i) such
amendment is authorized or permitted by this Indenture and that all conditions
precedent to the execution, delivery and performance of such amendment have been
satisfied; and (ii) the Indenture together with such amendment complies with the
TIA.
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<PAGE>
SECTION 10.7. Payment for Consent. Neither the Company nor any
-------------------
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 11
MISCELLANEOUS
-------------
SECTION 11.1. Trust Indenture Act Controls. If and to the extent that
----------------------------
any provision of this Indenture limits, qualifies or conflicts with the duties
imposed by, or with another provision (an "incorporated provision") included in
this Indenture by operation of, Sections 310 to 318, inclusive, of the TIA, such
imposed duties or incorporated provision shall control.
SECTION 11.2. Notices. Any notice or communication shall be in
-------
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
Anacomp, Inc.
[11550 North Meridian Street
Carmel, IN 46032]
Attention of
if to the Trustee:
IBJ Schroder Bank & Trust Company
One State Street, 11th Floor
New York, N.Y. 10004
Attention of Corporate Trust
Administration
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
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<PAGE>
Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 11.3. Communication by Holders with Other Holders.
-------------------------------------------
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA (S) 312(c).
SECTION 11.4. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
SECTION 11.5. Statements Required in Certificate or Opinion. Each
---------------------------------------------
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
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<PAGE>
(4) a statement as to whether or not, in the opinion of such individual,
such covenant or condition has been complied with.
SECTION 11.6. Rules by Trustee, Paying Agent and Registrar. The
--------------------------------------------
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 11.7. Legal Holidays. A "Legal Holiday" is a Saturday, a
--------------
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 11.8. Governing Law. THIS INDENTURE AND THE SECURITIES SHALL
-------------
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 11.9. No Recourse Against Others. A director, officer,
--------------------------
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
SECTION 11.10. Successors. All agreements of the Company in this
----------
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 11.11. Multiple Originals. The parties may sign any number
------------------
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 11.12. Table of Contents; Headings. The table of contents,
---------------------------
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
-83-
<PAGE>
SECTION 11.13. Severability. In case any provision in this Indenture
------------
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
ANACOMP, INC.
by
__________________________________
Name:
Title:
IBJ SCHRODER BANK & TRUST COMPANY,
as Trustee,
by
__________________________________
Name:
Title:
-84-
<PAGE>
EXHIBIT A
[FORM OF FACE OF SECURITY]
$
CUSIP NO.
13% Senior Subordinated Note due 2002
ANACOMP, INC., a [Delaware] corporation, promises to pay to
___________________________, or registered assigns, the principal sum of
_______________ Dollars on June 30, 2002.
Interest Payment Dates: June 30 and December 31
Record Dates: June 15 and December 15
Additional provisions of this Security are set forth on the other side
of this Security.
Dated:
ANACOMP, INC.
[Seal] by
----------------------------
Chairman of the Board and
Chief Executive Officer
----------------------------
[Secretary]
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
IBJ SCHRODER BANK & TRUST COMPANY,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
----------------------------
Authorized Signatory
A-1
<PAGE>
[FORM OF REVERSE SIDE OF SECURITY]
13% Senior Subordinated Note due 2002
1. Interest
--------
ANACOMP, INC., a [Delaware] corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above. The Company will pay interest
semiannually on June 30 and December 31 (each an "Interest Payment Date") of
each year [, commencing December 31, 1996]. Interest on the Securities will
accrue from and including the most recent date to which interest has been paid
or, if no interest has been paid, from the date of this Security. Interest will
be computed on the basis of a 360-day year of twelve 30-day months. The Company
shall pay interest on overdue principal at the rate borne by the Securities plus
1% per annum, and it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
2. Method of Payment
-----------------
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the June 15 or December 15 immediately preceding the Interest
Payment Date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. Except as provided in the next paragraph,
the Company will pay principal and interest in money of the United States of
America that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money mailed to a Holder's registered address.
In the case of any Interest Payment Date for this Security occurring on
or prior to June 30, 1997, the Company shall satisfy its obligation to pay
interest on this Security on such Interest Payment Date by delivering to the
Holder of this Security a new Security (an "Accrued Interest Security"), in the
form of this Security, dated such Interest Payment Date (and bearing interest
from such Interest Payment Date) and having a principal amount corresponding to
the amount of interest due on this Security on such Interest Payment Date;
provided, however, that the Company shall not issue an Accrued Interest Security
- -------- -------
pursuant to this paragraph in payment of any accrued interest payable upon any
redemption or repurchase of all or any portion of this Security, and instead
shall pay such accrued interest in
A-2
<PAGE>
cash. On each Interest Payment Date occurring after June 30, 1997, the Company
shall pay to the Holder of this Security an amount in cash equal to 100% of the
interest payment due on such Interest Payment Date.
3. Paying Agent and Registrar
--------------------------
Initially, IBJ Schroder Bank & Trust Company, a New York banking
corporation ("Trustee"), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
---------
The Company issued the Securities under an Indenture dated as of
_________________, 1996 ("Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
------
Section Section 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such
terms, and securityholders are referred to the Indenture and the Act for a
statement of those terms.
The Securities are obligations of the Company limited to $160,000,000
(plus the principal amount of any Accrued Interest Securities issued pursuant to
the second paragraph of Section 2 of the Securities) aggregate principal amount
(subject to Section 2.7 of the Indenture). The Indenture imposes certain
limitations on the Company and the Restricted Subsidiaries, including, subject
to certain exceptions, limitations on the Incurrence of Indebtedness, the
payment of dividends on, and redemption of, the Capital Stock of the Company and
certain of its Subsidiaries, the redemption of certain Subordinated Obligations
of the Company and certain of its Subsidiaries, the sale by the Company and
certain of its Subsidiaries of assets and certain Subsidiary stock, transactions
with Affiliates, Sale/Leaseback Transactions by the Company and certain of its
Subsidiaries and consolidations and mergers and transfer of all or substantially
all the Company's and certain of its Subsidiaries' assets. In addition, the
Indenture limits the ability of the Company and certain of its Subsidiaries to
restrict distributions and dividends from such Subsidiaries.
A-3
<PAGE>
5. Optional Redemption
-------------------
The Company may redeem the Securities in whole at any time or in part
at any time and from time to time at the redemption prices set forth below
(expressed as percentages of the principal amount thereof), plus accrued and
unpaid interest (if any) to the date of redemption (subject to the right of
Holders of record on the relevant record date to receive interest due on the
related Interest Payment Date):
If redeemed pursuant to this Paragraph 5
during the 12-month period ending
June 30 of the years set forth below:
Year Percentage
---- ----------
1996 103.000%
1997 103.000%
1998 102.625%
1999 102.250%
2000 101.875%
2001 101.500%
2002 and thereafter 100.000%
6. Mandatory Redemption
--------------------
The Company shall, prior to the fifth anniversary of the Issue Date,
redeem a principal amount of the Securities equal to the aggregate principal
amount of Accrued Interest Securities issued under this Indenture. The
redemption price shall be the price that would then be applicable under
Paragraph 5 in the case of an optional redemption.
7. Notice of Redemption
--------------------
Notice of redemption will be mailed by first class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption.
A-4
<PAGE>
8. Put Provisions
--------------
Upon the occurrence of a Change of Control, any Holder of Securities
will have the right to require the Company to repurchase all or any part of the
Securities of such Holder at a repurchase price equal to 101% of the principal
amount of the Securities to be repurchased plus accrued interest to the date of
repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the related interest payment date) as provided
in, and subject to the terms of, the Indenture.
Under certain circumstances, any Holder of Securities will have the
right to require the Company to repurchase all or part of the Securities of such
Holder at a repurchase price equal to 100% of the principal amount of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date) from certain Net Cash
Proceeds of Asset Dispositions as provided in, and subject to the terms of, the
Indenture.
9. Subordination
-------------
The Company's payment of the principal of and interest on the
Securities is subordinated and subject to the prior payment in full of the
Company's Senior Indebtedness as more fully set forth in the Indenture. Each
Holder of Securities by his acceptance hereof covenants and agrees that all
payments of the principal and interest on the Securities by the Company shall be
subordinated in accordance with Article 9 of the Indenture and each holder
accepts and agrees to be bound by such provisions.
10. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000 (except that Accrued Interest Securities
may be in any denomination). A Holder may transfer or exchange Securities in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes and fees required by law or permitted by the Indenture. The Registrar
need not register the transfer of or exchange any Securities selected for
redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or any Securities for a period of 15
days before a selection of Securities to be redeemed or 15 days before an
interest payment date.
A-5
<PAGE>
11. Persons Deemed Owners
---------------------
The registered Holder of this Security may be treated as the owner of
it for all purposes.
12. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company
at its written request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
13. Discharge and Defeasance
------------------------
Subject to certain conditions, the Company at any time may terminate
some of or all its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Securities to redemption or maturity,
as the case may be.
14. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company and the Trustee may amend
the Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, to comply with Article 5 of the Indenture, to provide for
uncertificated Securities in addition to or in place of certificated Securities,
to add Guarantees with respect to the Securities, to secure the Securities, to
add additional covenants or surrender rights and powers conferred on the
Company, to comply with any request of the SEC in connection with qualifying the
Indenture under the Act or to make any change that does not adversely affect the
rights of any Securityholder.
15. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest on the Securities; (ii) default in payment of principal
on the Securities at maturity, upon acceleration, redemption or otherwise, or
failure by the Company to redeem or Purchase Securities when required; (iii)
failure by the Company to comply
A-6
<PAGE>
with other agreements in the Indenture or the Securities, in certain cases
subject to notice and lapse of time; (iv) certain accelerations (including
failure to pay within any grace period after final maturity) of other
Indebtedness of the Company if the amount accelerated (or so unpaid) exceeds
$7,500,000 at the time; (v) certain events of bankruptcy or insolvency with
respect to the Company and any Restricted Subsidiary; and (vi) certain judgments
or decrees for the payment of money in excess of $7,500,000. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Securities may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders.
16. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
17. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
A-7
<PAGE>
18. Authentication
--------------
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
-------------
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with rights of survivorship and not as
tenants in common), COST (= custodian), and U/G/M/A (= Uniform Gift to Minors
Act).
20. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
21. GOVERNING LAW
-------------
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE TO THE SECURITYHOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE
TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
ANACOMP, INC.
[11550 NORTH MERIDIAN STREET]
CARMEL, IN 46032
ATTENTION OF CORPORATE COMMUNICATIONS
A-8
<PAGE>
- --------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date: _______________ Your Signature: _____________________
(Sign exactly as your name appears on the other side of this Security)
- --------------------------------------------------------------------------------
A-9
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.7 or 4.9 of the Indenture, check the box:
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.7 or 4.9 of the Indenture, state the amount:
$___________________________
Date: __________________ Your Signature: __________________
(Sign exactly as your name appears on the other
side of the Security)
Signature Guarantee:___________________________________________
(Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the
Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934.)
A-10
<PAGE>
Schedule I to Indenture
Indebtedness To Be Outstanding
------------------------------
Immediately After the Issue Date
--------------------------------
<PAGE>
Schedule II to Indenture
Liens To Be Outstanding
-----------------------
Immediately After the Issue Date
--------------------------------
<PAGE>
Schedule III to Indenture
U.S. Restricted Subsidiaries
----------------------------
1. Florida AAC Corporation
